2023 Performance Evaluation Process Flowchart, Tips & Timeline

Performance management systems focus on the most important resource in a company; the people. Yet, a study by Deloitte found that over 50% of companies surveyed did not feel their performance management system was worth the time and effort.

This statistic shows HR professionals must be thoughtful about performance management. What are you measuring? How are you measuring it? Why does it matter?

A well-designed performance evaluation process flowchart helps organizations clearly define goals and expectations while providing a path for employees to improve.

This article contains  resources to help you develop your performance evaluation process. Start with the flowchart then work your way down through the detailed explanation.

What are the Steps of the Performance Evaluation Process Flowchart?

1. Setting goals

First, you must clearly articulate the responsibilities and core functions of each role in your organization. According to SHRM’s Guidelines for Establishing Effective Performance Goals, the goals you set for employees must be:

• ‍Clearly defined
• Directly linked to organizational goals and values
• Measurable and reasonable
• Targeted – no more than three goals at a time

Defining and tracking goals can be difficult if you're relying on emails and Google Docs. PerformYard allows companies team to define and track their individual goals in a dashboard. You can tie employee goals to company wide goals. The software simplifies the process for managing goals  throughout the year, and has functions for documenting conversations between employee and manager.

2. Quarterly check-ins

Meeting one-on-one with employees every three months gives you a window into their strengths, weaknesses, and needs. In these check-ins, you will discuss short-term goals for your employee, defining milestones and benchmarks for success.

Check-ins are also a great time to offer feedback on how employees can improve their performance and offer coaching to meet any gaps in their skills.

3. Post Check-in Review

After the check-in, the manager and employee should fill out a survey detailing how the process went and how it could improve. You can collect this feedback via a brief used to refine the process for the next quarterly review.

4. End of Year Review

The end-of-year review, often tied to compensation, is a time for employees and managers to review long-term goals for professional development and set goals for the coming year. These longer-term goals can align with job functions or relate to personal growth. 

While the end-of-year review tends to reflect on the previous year’s performance, the most effective end-of-year reviews are future-focused. Think about how the employee can improve in the coming year.

5. HR Evaluation of Review Process

Because the performance review process often relies on qualitative performance assessments, HR needs to evaluate how assessments are performed and how employees are rated. Evaluator bias can unfairly impact an employee’s professional growth and the opportunities they are afforded. Including HR oversight in your performance evaluation process can prevent bias from negatively impacting your organizational culture and impeding growth.

What is the Purpose of the Performance Evaluation Process Flowchart?

The employee and manager can both uncover valuable information by following the performance management process flowchart. For the employee, performance evaluations are an opportunity to get feedback on their performance and clarify the expectations they must meet.  

For the company, the performance evaluation process measures the value of an employee’s work. The organization can use the results of an employee’s performance evaluation to inform salary negotiations and identify candidates for promotion.

HR can use negative evaluations to identify employees who need additional training or referrals for performance improvement plans. When managers flag deficiencies in performance in the evaluation process, they can plan for the next steps including coaching, retraining, demotion, or even firing.  

Example Performance Review Process Timeline

A robust performance review process combines multiple elements:

• ‍Scheduled annual and quarterly reviews
• Goal setting
• Coaching
• Ongoing informal feedback and evaluation

Each of these elements contributes to a growth-oriented work environment that elevates performance by encouraging employees to develop their skills.

Annual Reviews

Annual reviews are the most common type of performance review. These reviews can be scheduled around company-wide evaluation periods or tied to individual employees’ work anniversaries.

In these reviews, employees and managers discuss all that has been accomplished in the previous year, highlight opportunities for improvement and create a plan to meet goals for the next year.

Disadvantages of Annual Reviews

While annual reviews have an important role to play in your overall performance review process, they aren’t enough on their own. Engaging in meaningful and productive performance management requires frequent evaluations and feedback opportunities.

Leaders in large organizations may feel there isn’t enough time or resources to review employees more often. Failing to invest in your organization’s continuous improvement may save time in the short term but it will cost you the opportunity to increase productivity in the long term.

Another disadvantage of annual reviews is that, instead of fostering ongoing dialogue between employees and managers, yearly evaluations feel like a final grade.

How can a manager accurately measure an entire year of performance for even one of their direct reports?

‍What is the value in telling an employee in December that they failed to meet expectations in June?

Research shows that these summative evaluations can cause real problems for retention. In one poll, 85% of Americans said that a negative review would be enough to make them start looking for another job.  

A lot can change in an organization in a year. Organizational changes can impact how an employee’s performance is perceived and measured, even if the employee hasn’t changed how they do their job. How do you evaluate employee performance if the goals are always changing?

Examples of this type of organizational change include:

Changes in the organizational structure can result in the realignment of teams and direct reports.

Introducing new software can expose weaknesses in technical competence that can negatively impact performance.

Shifts in organizational culture can change what skills and qualities are valued and which are to be discouraged.

When to Use Annual Reviews

Annual reviews work best when manager and employee work to set goals for the year and establish a plan for reaching those goals with defined milestones and measures of success.

These reviews are also an opportunity to revisit quarterly evaluations and discuss further opportunities for growth. Finally, this more comprehensive performance review should give HR the information it needs to determine salary increases or award other performance-based incentives.

Annual reviews work best when the employee and manager can see data from all the 1:1s, quarterly reviews and 360 reviews that happened throughout the year. Without this data, annual reviews turn into an exercise in remembering what happened. PerformYard stores all data from all review cycles in every employee's profile.

This data makes it easy to conduct annual reviews based on the data from the past year.

Quarterly Check-Ins

Quarterly reviews are opportunities for managers and their direct reports to discuss short-term goals and opportunities for growth. These performance reviews offer more useful feedback than annual reviews simply because they happen more often.

When employees and managers check in regularly and discuss expectations, this open dialogue creates an environment where employees feel supported. Plus, employees who feel that their managers are invested in their success are more engaged and committed to growth.    

Continuous Feedback

Quarterly and continuous feedback can indeed be resource-intensive, but these frequent interactions are essential to improving productivity and elevating performance. Not to mention, no employee wants to wait a year to find out their manager has noticed that they have been doing their job wrong. Why would a manager be willing to wait months to address something that could be corrected today?

Some employees want to do a better job but are afraid to ask for help. They may be afraid to ask a manager or coworker for help because it may make them appear incompetent. Without timely feedback and support, these employees will continue to make the same mistakes.

When managers offer constructive feedback to employees, they empower them with greater clarity about expectations for their performance. The feedback empowers employees to ask for additional guidance.  

Implementing the Performance Evaluation Process Flowchart

Managing a robust performance evaluation process is simple if you have the right tools. PerformYard’s Performance Management software makes it easy to support employee development.

The simple dashboards show a range of performance data in one place, from annual reviews to quarterly goals, self-evaluations, and competencies. With this comprehensive tool, managers can easily track performance and generate reports and data that support HR decision-making.

Performance management is more than just a tool to evaluate success or failure. With effective performance management process steps in place, you can encourage ongoing dialogue, clarify expectations, and develop your employees by encouraging personal growth. The process ensures employees and managers continue to align their work with your organization’s values and goals.

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