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What is the best structure for a Performance Development Review (PDR)?

By 21/01/2020October 20th, 2022Employee Management, Personal Development
Performance development review

A Performance Development Review (or PDR for short) is not a new concept. In fact, many HR professionals are starting to discourage their organisations from implementing them, but they do still serve a purpose and are a long way off from becoming extinct.

And rightly so, especially in growing businesses.

A PDR will help your employees focus on the tasks that contribute towards the overall goal of the business and, they know exactly where they stand in terms of their expectations, performance and job security.

PDRs will also provide line managers and HR teams with a paper trail of performance to better reward your top talent and provide a course of action for your lowest (underachievers). Essentially, an employee should never be surprised by a particular outcome such as a promotion, pay rise, training course or even dismissal.

Regular communication improves manager and team member rapport. It is a great way to ensure the priorities of the team are being actioned in accordance with their deadlines and any gaps in their skills can be addressed.

With all of this in mind, it’s clear that there is still a place for Performance Development Reviews.

How do I best structure a performance development review?

Step 1: Set yearly goals and expectations

Whether your financial year is January or April, you should start your yearly PDR here. This will mean that you have fresh company goals from which you can align your team’s performance and objectives.

Each individual goal should be SMART (Specific, Measurable, Achievable, Results-orientated and Time-bound). Remember that these goals will be specific to each employee’s role and should be clearly aligned to your wider company goals. This way, the employee knows exactly how their role contributes to the bigger picture and so they feel valued within the organisation.

For example, if a company goal is to increase revenue by 10% before the end of December 2020, an individual goal for a salesperson may be to win £200,000 of new business before the end of December. This is directly aligned to the company goal.

Step 2: Hold regular meetings, preferably monthly

Now that the employee knows what their yearly goals are, it’s time to track their performance and set smaller, more frequent goals to help hit those goals. For example, using the £200,000 yearly target, a monthly goal may be to make 400 calls a month to ensure their sales pipeline is full, making it easier to reach the yearly goal.

Each meeting should review the previous objectives set out, listening to and giving the employee feedback and setting the following month’s goals. Every performance development review should be prepared for from both sides, have a brief agenda and have an outlet for constructive feedback.

Step 3: Midpoint review

Every six months (or three months if it’s during a probation period) you should have a midpoint review. Within these reviews, you should cover the past three or six months in detail rather than just the previous month. This is where your note-taking from the regular monthly meetings becomes useful as you can refer back to what was discussed.

Similar to the monthly reviews, you will discuss progress towards the yearly goal and discuss the overall performance of the employee. This review may also be a beneficial time to discuss any training needs or anything else the employee needs to help with in order to achieve their targets.

Step 4: End of year review

As the title suggests, this is a recap of the employee’s yearly performance. This is the most important performance management review you will do as it will help towards setting up next year’s goals, indicate whether a reward is suitable for top talent or where there are any shortfalls in an employee’s skillset.

Important tips for a successful performance development review

PDRs can be difficult to get right. The line manager has to ask the right questions and provide constructive feedback whereas the employee needs to think about their workload, performance and be open and honest. Otherwise, the whole PDR process is pointless.

These tips will help you turn a mediocre PDR into a positive experience for your employee.

  1. Avoid being biased

As a line manager, you need to stick to facts gained from analysis, observations, and feedback. Don’t discriminate or jump to conclusions – be fair and honest.

  1. Privacy is important

Every PDR you do should be a private affair to ensure you have an open conversation. Any feedback or documents should be confidential to let your team members know that you value them.

  1. Two ears, one mouth

Allow your employee to do most of the talking. You should listen at least twice as much as you talk. PDRs are a great way to hear some honest views that may give you ideas to help better run your department or business. Also, don’t forget that if you speak first and state your views, the employee will most likely agree and not fully share their real feelings. Give them ample opportunity to say their piece.

  1. One-to-one coaching

Coaching your employees should be a constant process to ensure their progress and building it into their PDR is a must. Use the time to discuss what success looks like, and even role-playing to help the employee overcome any uncomfortable situations. 

The best questions to ask in a performance review

Within Natural HR, our all-in-one HR and payroll system, you can run your entire PDR process within the system. With this in mind, we have created a default template for our customers to use, which covers everything you need to run a successful PDR.

The questions you should ask for each regular review includes:

  • Employee name
  • Date of review
  • Have the actions from the previous meeting been completed?
  • If not, what can be done to ensure outstanding actions are completed by the next meeting?
  • Has there been progress on individual yearly goals?
  • What have you done well this month?
  • What could you have done better this month?
  • What do you need help or support with?
  • Do you have any issues or concerns?
  • Is there anything else you’d like to discuss?
  • Manager observations/comments

You should also set a series of action points/goals for the following month, which will give you the information you need to run next month’s performance review.

How to capture the outcomes for each PDR

As stated above, you should use an HR system such as Natural HR to capture information from each review. With ever-changing legislation regarding employees, you need a central database that holds previous conversations against every employee.

An HR system will allow you to quickly look back through previous review meetings and goals to decide on the best course of action. It will also save time, reduce the amount of paperwork that a Performance Development Review generates and notify the employee to complete their review form ahead of your meeting.

To see how Natural HR can help streamline your PDR process, book a demo with one of our HR system experts.

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