The Benefits of Performance Reviews


The Benefits of Performance Reviews

By Performance Reviews ( also known as appraisals), play an important role in an employees working life. Although performance reviews are not a legal obligation, they do offer many benefits.  Conduct regular performance reviews
generally maintain stronger relationships with their staff, have higher retention rates and an overall positive culture within the workplace.

What can conducting Performance Reviews do?

Performance reviews can be done with the following objectives in mind:

  • Maintaining records in order to determine compensation packages, wage structure, salary increases and bonus schemes
  • Identifying the strengths and weaknesses of employees. This helps ensure that the right people are in the right job. Happy employees promote a positive and happy work place.
  • Maintaining and assessing the potential further growth and development of an employee
  • Providing feedback to employees regarding their performance

Advantages of Performance Reviews

Conducting regular performance reviews, should be seen as an investment for the business as Performance offer many benefits, including:

  • Promotion: Performance reviews can help Managers/Supervisors discuss and consider any promotion or successional opportunities for high performing employees.
  • Compensation: Performance reviews can help Managers/Supervisors better determine attractive compensation packages for employees. By merit rating and taking into consideration work performance, attendance, communication etc during a review, employers can better determine salary packages.  Packages could include bonuses, higher salary rates, extra benefits and allowances for effective employees.
  • Employees Development: Performance reviews help Managers/Supervisors to frame future training policies and programs. It also helps to analyse strengths and weaknesses of employees, to ascertain if the right employee is in the right job.  This will help youto plan and map out future positions and candidate requirements.
  • Communication: For any organisation, effective communication between employees and employers is very important. Having an honest approach during performance reviews and an ‘open door’ policy further creates a caring culture where employees feel listened to and validated.

It’s important to remember..

Above all, effective performance reviews serve as an excellent motivational tool, regardless of whether performance has been good or poor.  If an employee is efficient and contributing positively to the overall business, they should be encouraged and even rewarded where possible.

Alternatively, if an employee is ‘under-performing’, reviews can act as a learning curve for that employee to try harder and do better.  It is important to provide guidance to the under performing employee and show them how they can improve.  This is important because the employee may be unaware of their performance and how to provide greater value to your business.

As an employer it is your role to deliver constructive feedback and promote strategies to increase performance.  In addition it is always important to provide support and let your employees know that you are there to assist them along the way…not just during review times.


Olivia Bates

Olivia is an HR professional with over 14 years industry experience. She brings a great wealth of experience to the HR Central team and focuses mainly on supporting our vastly growing Regional Victoria client base. Olivia dedicates most of her time helping clients with: * Organisational development and change management * Employee engagement and coaching including work with Leadership teams from Geelong Football Club * Employee relations and dispute resolution * Leadership development and youth empowerment. This program is aimed at disengaged people and provides skills in job seeking, well-being, finances, personal presentation and career planning * HR Products developed include The Ops Box – a highly visual HR risk management tool housing essential policies and procedures for any workplace * Project and Grant management experience * Contract and Tender development & management * Permanent and executive recruitment. Olivia has placed candidates across a multitude of industries with a strong focus on the mining sector Australia wide.

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