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What are performance reviews?
Work Management
Last modified date

Feb 24, 2023

Employee Performance Reviews: 7 Ways to Drive Productivity and Retention

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Magnus Eriksen

Blog average read time

7 min

Last modified date

February 24, 2023

Performance reviews are great tools for evaluating, monitoring, and enhancing employees’ performance and productivity.

While some organizations view these as routine administrative tasks, they can significantly improve productivity and performance in the workplace when done correctly.

The review process allows managers and employees to evaluate and discuss job performance, identify strengths and weaknesses, and set goals for future growth and development.

By utilizing this process effectively, organizations can enhance their workforce’s productivity, motivation, and engagement, resulting in improved organizational performance and success.

According to a study by Gallop, employees who receive regular feedback are three times more likely to be engaged at work, increasing job satisfaction and, ultimately, employee retention.

This is why reviewing your employees’ performance can be a game changer for your company’s overall performance.

So, this article will discuss how you can use this routine activity to increase your productivity and gain a competitive advantage in the marketplace.

What are performance reviews?

Before we dive in, let’s first discuss what exactly is a performance review.

Simply put, a performance review is a formal process of evaluating and measuring an employee’s job performance over a specific period, typically a quarter or a year. The direct managers or supervisors take the time to evaluate the employee’s achievements against pre-defined goals and expectations.

This is usually done in a face-to-face meeting where the employee receives feedback on their performance and discusses areas where they can improve.

The goal is to help you and the employee understand their strengths and weaknesses and what they must work through to meet their goals and expectations.

Both parties also collaboratively identify and set goals for the next review period.

Key Components of an Effective Performance Review.

In a typical organization, managers and team leaders can leverage performance reviews to maximize and align teams’ efforts. But if not done correctly, they can be a source of disarray, making the employees feel targeted and victimized.

So how do you ensure that your evaluations are set for success? Here are some key elements a good performance review system must have:

  • Clear performance expectations: The employee should clearly understand the expectations and goals they are being evaluated against. The manager should review the employee’s job description, KPIs, and other relevant information.
  • Regular feedback: Managers should offer regular feedback throughout the review period to ensure that the employees are aware of any areas for improvement and can make adjustments as needed.
  • Self-assessment: Employees should be able to assess their performance and provide their own perspective on their strengths and areas for improvement.
  • Objective evaluation: The manager should evaluate the employee’s performance based on objective criteria, such as completed projects, metrics, or customer feedback.
  • Development plan: A development plan should be created based on the review, with specific action steps and timelines for refinement.
  • Recognition of achievements: The manager should acknowledge and recognize the employee’s achievements and contributions to the organization.
  • Clear communication: The review should be conducted in a clear, honest, and respectful manner, with specific examples provided to support feedback and evaluation.
  • Two-way dialogue: The review should be a two-way conversation, in which the employee having the opportunity to ask questions, provide feedback, and discuss their own career aspirations.

Here are some of the key differences between a one-way, traditional employee review and a two-way, more modern, and holistic approach:

employee review comparison

Remember that the modern review system is different from the old rigid performance review system that was one-way, meant to reprimand employees. Hopefully, those days are gone.

7 Steps to drive employee performance

Carrying out performance reviews can be highly stressful for both the team leaders and employees. You can optimize the process for success in these 7 steps:

1. Identify Strengths & Weaknesses

Identifying an employee’s strengths and weaknesses is the cornerstone of any effective performance review. It allows managers to provide specific feedback, enabling employees to focus their efforts on areas that require improvement while leveraging their strengths.

During a performance review, you can highlight areas where your employee has excelled and encourage them to keep excelling. For instance, if an employee has shown exceptional skills in a particular area, you can use this information to delegate tasks that align with the employee’s strengths. This will help boost the employee’s confidence, productivity, and job satisfaction.

Conversely, identifying an employee’s areas of weakness is equally important. Once you have discussed and identified weaknesses, you can take steps to provide support and resources that can help employees improve their performance. For example, suppose an employee is struggling with a particular skill or task. In that case, you can provide additional training or coaching to help them develop the skills they need to excel.

2. Set Performance Goals

Performance goals are specific and measurable objectives that employees work towards to achieve their targets and contribute to the organization’s overall success.

Typically, performance goals are specific and measurable and align with the company’s objectives. For example, a performance goal might be to increase sales by 10% over the next quarter or to complete a project on time and within budget.

During your periodic performance reviews, you should aim to work with your employees to identify and set achievable performance goals for the next period. This way, the employee can focus all their effort on the goals and understand how their work contributes to the company’s success.

You should also regularly check in and provide feedback throughout the review period. This will help motivate your team members to stay on track and make adjustments as needed to achieve their objectives.

3. Recognize & Reward Good Performance

Regular and honest communication between managers and employees is essential to building an accountable workplace culture and productive working relationships.

During a performance review, you can provide employees with specific and actionable feedback on their performance so they understand what they are doing well and where they need to improve.

In addition, companies can offer incentives or privileges to employees who maintain a high performance level and achieve certain milestones over a set duration. For example, a manager can give corporate credit cards to employees who run up expenses while conducting business.

This can be a streamlined way of completing necessary business transactions and also give the employees a sense of achievement with the trust they’ve been given.

Of course, it’s essential to monitor each transaction conducted on the company credit card and to make sure the employee understands the responsibilities that come with it. Alternatively, if an employee uses a personal card for any business transactions, these will need to be recorded and refunded by the company.

The company and not the employee must incur any additional charges or fees. For instance, the average credit card processing fee is 3.5% for online transactions specifically, which will need to be covered by the company.

Just make sure that the appropriate parameters are set with these privileges and that the employee understands his or her responsibilities.

4. Provide Training & Development Opportunities

Research shows that 94% of employees offered learning and development opportunities stay longer in the organizations. The numbers don’t lie.

The easiest way to keep your employees motivated and on top of their game is to encourage them to acquire new skills, knowledge, and experience.

During a performance review, you should discuss each employee’s career development plans and identify areas where they can improve their skills and knowledge. You can then offer additional training, coaching, or mentoring to help them develop new skills or improve their performance in specific areas.

This shows that the company cares about personal and financial well-being, which makes them feel valued and motivated to meet their performance goals.

Additionally, by investing in their employees’ development, managers can help to build a talented and skilled workforce that can contribute to the organization’s long-term success.

5. Involve Employees In The Process of Setting Goals

Good communication is crucial for employee performance. Goals are specific and measurable objectives that employees work towards and are essential for improving productivity and performance.

During a performance review, you should work closely with employees to set goals aligned with the organization’s objectives, such as OKRs. Such goals should be SMART: specific, measurable, achievable, relevant, and time-bound.

Clear and well-defined goals help employees to understand what they are working towards and how their work fits into the organization’s overall strategy. In addition, you should provide ongoing feedback and support to help employees achieve their goals.

Regular check-ins help identify any obstacles or challenges and allow managers to provide the support and resources employees need to succeed.

6. Improve Two-Way Communication

Also, you should set up effective ongoing communication with employees throughout the year. This can take many forms, such as one-on-one meetings, team meetings, or regular check-ins.

During these meetings, you can provide feedback on employee performance, discuss any challenges or obstacles, and work together to identify solutions.

As mentioned above, it’s essential to establish a healthy two-way dialogue between the manager and the employee. The employee should be allowed to voice his or her concerns about anything impacting their work performance. You should likewise take advantage of this dialogue to ensure that they are in overall good health and spirits.

It’s crucial, for example, to confirm that your employees enjoy a healthy work-life balance and manage work-related stress well so they can get enough quality sleep each night. An employee who isn’t properly rested each day is at risk not only for reduced performance at work but also for their own safety and well-being.

For example, working long shifts or doing overtime when employees need to also commute long hours poses a risk factor. Research shows that driving without receiving enough sleep is astonishingly dangerous. A twenty-hour wake period is the equivalent of driving with a BAC content of 0.10%, significantly increasing the odds of an accident with long-lasting repercussions.

Recognizing fundamental issues impacting an employee’s performance or well-being is only achievable if the communication lines between the team leaders and members are open and efficient.

7. Give Employees Growth Opportunities

During performance reviews, managers should identify weaknesses and establish an improvement plan. Then the managers can help employees take actionable steps toward improving their performance, leading to increased productivity and performance.

Employees who feel supported in their efforts to improve are more likely to be engaged and motivated. Thus, they are more likely to stay with the organization long-term.

In addition, providing opportunities for employees to grow and develop their skills is essential for maintaining a motivated and engaged workforce. Ultimately, it will improve overall productivity and performance.

For instance, the workplace is going digital, and everyone needs to spruce up their digital skills. Offering digital skills training to your employees would be a great way to enhance their productivity.

As a team lead, you must identify development opportunities relevant to the employee’s job and align them with their career goals. You’ll definitely win your employee thanks to your concern for their growth, be it career or company.

Finally, managers need to recognize and reward employees for their development efforts. Recognition can take many forms, such as a promotion, a pay raise, or simply acknowledging their hard work and dedication. Also, if it’s a holiday or even Christmas, consider these 10 ways to thank your employees.

By recognizing and rewarding employee development efforts, managers can reinforce the importance of ongoing learning and growth and motivate employees to strive for excellence.


In conclusion, using employee performance reviews to enhance productivity and performance is critical to any successful organization.

By providing regular feedback, setting clear expectations, recognizing and rewarding success, identifying areas for growth and development, and establishing an improvement plan, you can help employees to stay engaged, motivated, and productive.

In addition, by focusing on these key components, organizations can create a culture of continuous improvement where employees are empowered to learn, grow, and achieve their full potential.

Ultimately, employee reviews can lead to improved productivity, performance, and overall success for the organization.

Magnus Eriksen


Magnus Eriksen is a copywriter and an eCommerce SEO specialist with a degree in Marketing and Brand Management. Before embarking on his copywriting career, he was a content writer for digital marketing agencies such as Synlighet AS and Omega Media, where he mastered on-page and technical SEO.

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