What’s the purpose of a performance review?

purpose of performance review

The purpose of a performance review is to communicate with one another, provide feedback about job performance, facilitate good working relationships, and to look at ways to contribute to professional development. Providing consistent and regular feedback of employee performance is a vital aspect of a managers job. By giving constructive feedback on a regular basis, the employee has the information they need to make any improvements or corrections needed and know where they are on the right track and have the encouragement and confidence to continue. Regular feedback makes sure the employee knows exactly where they are with their performance expectations and prevents problems from building up.

Consistency is key

As a manager you should make sure regular review sessions are built in to your annual diary. There should be a clear understanding between manager and employee of what the performance expectations are. After all, if your employees don’t know what success looks like, it makes it very difficult to achieve. If you both know when, how and what is being discussed there are no surprises and the review is much more likely to have positive outcomes. 


Prior to completing the review, it’s important to do your research. Consult with others on the team and external colleagues and partners. How has the employee communicated and collaborated with them? And ask the employee to prepare their feedback in advance. How do they think they have performed and why?

Avoid bias

Personal opinion can sometimes cloud facts. As a manager you must not let this happen. Consider keeping in mind the following factors when preparing and conducting a performance review:

  1. Halo Effect – you like the employee so you rate their performance favourably despite evidence to the contrary. You must remain impartial, for good or for bad.
  2.  Overly Critical – you don’t like the employee so you set unrealistically high standards and do not appropriately acknowledge successes. This will lead to demotivation and disengagement and the organisation could eventually lose a valuable employee.
  3. Overly Lenient – for whatever reason, you decide to go easy on the employee. Similarly to the halo  effect and overly critical, this will not end well. Anything other than the facts of the situation will cloud judgement and motivation. 
  4. Middle of the Road – you don’t like to rate some more than others so generally give everyone a similar review. But, not everyone performs at the same level, the performance reviews should reflect this.
  5. Recent Error – perhaps the employee has had made a recent mistake. This could influence the performance unfairly. You need to look back over the entire performance time scale and review it as a whole.


This is a mnemonic/acronym used to set objectives such as employee performance/ management or personal development. SMART stands for; specific, measurable, attainable, relevant and time bound.

Setting SMART goals means you can clarify ideas, focus efforts, use time and resources productively, and increase chances of success. To set SMART goals you will need to work closely with your team. The process should be collaborative and take into account your organisations overall strategy, the purpose of your department or project and individual objectives. 

By doing so you create a shared primary goal.  This approach can drastically increase both employee and business performance as it firmly links the employee goals to your organisations overall strategy.


Engage in Learning’s Performance Management Pathway courses will introduce you to ways to develop a motivated, high performance workforce and how to set achievable expectations. The Communicating Performance Expectations module will show ou how to communicate your expectations positively and clearly and get the best from you team. 

Our Communicating Performance Expectations course can be found here