A study by Right Management has found that nearly half of all workers are “disconnected” with their work, and at risk of leaving and under-performing1.

The report shows that supporting employees’ long-term career goals is now one of the most important processes an organisation can do to boost engagement levels2.

Now is the time to organise structured performance reviews to ensure employees and management are clear on the direction in which the organisation is going.  The performance reviews should track your employee’s performance over the last 6 months, providing constructive feedback and praise.

It is critical that you discuss each employee’s career goals identifying pathways for future opportunity and ongoing development. As business owners are always developing new business performance reviews become less of a priority due to time constraints.

Employees expect regular and systematic feedback on their performance. It is common for reviews to be put on hold leaving staff frustrated and disengaged with the business.

Performance reviews can sometimes also be perceived as “I am in trouble”, “I am being judged” or “I am going to be performance managed out of the business”.  This happens because they have never had a proper performance review done with them in the past.  Businesses often see performance reviews as a waste of time or a chore which leads to an increase in poor performance and frustration between both parties.  This needs to be changed immediately because high performers in your business want to be reviewed on a regular basis.


Performance reviews are designed for good interaction with your employees and managers.  The objective of a performance review is to have an open conversation to ensure both parties are engaged in achieving the company’s business goals and contribution to growth.   This is why we strongly recommend setting Key Performance Indicators (KPI) and Key Result Areas (KRA) because an employee’s review can reflect what they are contributing towards the company’s strategic goals during their course of employment.

What needs to be understood is regular meetings and quick one-on-ones are not performance reviews, according to the Australian Institute of Human Resources (AHRI), 4 out of 5 respondent’s out of 1600 participants surveyed had performance review processes that were either somewhat ineffective or just ineffective3. A review will only be effective if action items and plans are supporting the business plan and vision of your business growth.  By identifying skill gaps and areas of improvement you will not only improve the employee’s loyalty towards the business but also contribute to your bottom line.  KBA strongly believes that through quarterly or half yearly performance reviews employee satisfaction and job fulfilment will endeavour to increase within your workplace.

We help many business owners get this process right as we see so many missed opportunities with employees, especially managers. It is always expected that managers know how to conduct regular performance reviews on their staff, however if they have not been trained then performance reviews will be a waste of time. Senior Lecturer at RMIT University, Michael Sargon, states that if managers have not received performance review training then they are often reluctant and therefore do not address what needs to be within reviews4.

The other BIG gap in performance reviews? Many business owners also neglect to review their management team which can lead to the company goals being delivered incorrectly. If the managers do not have effective performance reviews themselves then how are they expected to facilitate reviews that drive performance?

If you want to grow your business then spend the time and plan to do productive performance reviews.  Engage with your staff and give them recognition, praise and highlight key areas that will make a difference to their performance in your business. Set yourself a goal and conduct all of your performance reviews over one or two days each quarter or half yearly and you will be surprised what may come out of them.

Performance reviews need to be effective and if you need help then get expert advice because a performance review conducted the wrong way also may have a reverse effect.

For more help please call Key Business Advisors 1300 4 ADVICE 

1  Jo Knox (2012), ‘Daily hr news’, hrdaily
2  Jo Knox (2012), ‘Daily hr news’, hrdaily
 Leon Gettler (2009) , ‘The Perfect Performance Review’, SmartCompany P/L
 Leon Gettler (2009) , ‘The Perfect Performance Review’, SmartCompany P/L

About The Author

Colin Wilson

Director and founder, Colin Wilson drives Key Business Advisors with determination, passion, and motivation.

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