There is no specific legal obligation to conduct a performance review or to provide a pay rise, unless it’s agreed to in an employment agreement or stated in the workplace polices. However, it is a good idea to have some form of performance feedback system and criteria in place that both you and your employee understand.
The degree of formality of the review will vary depending on your workplace.
What you could do
- Conduct a regular performance review (eg 3 or 6 monthly) to provide feedback on the employee’s performance and discuss expectations/objectives for the year. You should not raise surprise issues that were not discussed during the year. If you do and this results in a negative impact on the employee, for example withholding a pay increase, you may be seen as acting in a manner that was not fair or reasonable, having accepted (through your inaction) the employee’s performance.
- Have regular catch-up meetings (eg every 2 or 3 weeks) with your employee on the work they are doing and provide ongoing feedback. Make sure that you cover off any negative feedback as part of your regular catch-ups with your employee.
- It’s a good idea to prepare really well for any review. Both employers and employees should bring notes and examples of what has gone well and what hasn’t. Time preparing beforehand will make the meeting more valuable and help both parties.
- Allow your employee time to prepare for the review, so they can bring up examples of good performance during the review period. It is useful to have employees think of things that might have gone better – this can be the basis for a great development conversation and is more meaningful than managers pointing out issues. It can be useful in some workplaces for the employee to fill out a self-assessment before the review with their examples. (Although if your employee has not recognised an area of concern then you will still need to raise it).
- Seek feedback from relevant stakeholders and people the employee works with, such as co-workers, customers and managers. It’s a good idea for the manager and employee to talk about who these people will be before the feedback is requested.
- Make sure the employee knows their work is appreciated when they perform well, and discuss how they will continue to develop their skills.
- Link the performance review with their salary review, so that good performance can be rewarded with an increase in salary where appropriate. Other options can be gift vouchers, bonuses, time off in lieu or discretionary leave.
- If your employee is not performing well, make sure you clarify your expectations and support them by discussing what support they need and giving them time to improve.
- Acknowledge performance achievements in nonmonetary ways, such as celebratory morning teas or a simple surprise thank-you eg a chocolate fish with a thank you note, mention in a group newsletter, recognition note from a senior manager or chief executive or email.
- Put personal views aside during performance reviews, be objective and fair. Treat all employees in a consistent way.
Managers and employees should document performance conversations and keep this information in a safe place. It’s often hard to remember the detail of what was discussed and can be valuable to refer back to.