As 2023 comes to a close, many companies are finalizing year-end reviews. Year-end reviews may bring stress and anxiety to employers and employees alike, but the truth is that they’re an excellent opportunity to invest in your team and boost their long-term success.
As you establish your year-end review process, your first task is to decide what type of review you’d like to implement. An overall company performance review will focus on whether the organization met its goals and what to improve moving forward. An individual employee performance review will be more granular, focusing on each individual’s contributions, where they succeeded, and where they have room to grow. Last but not least, a self-evaluation will ask employees to reflect on their performance throughout the year, identifying their strengths, areas of improvement, and goals.
Regardless of how you structure reviews at your organization, there are a few key areas you should make sure to include. Here are the five essential elements of any successful performance review.
First, start by evaluating what went well this year. It’s essential to reference company goals and forecasts. For example, did your company meet the financial goals set last year? Or were you able to bring in new business and increase your bottom line? Highlighting such achievements gives you the chance to reflect on where they succeeded this year and examine how you were able to accomplish each goal. It also helps guide you in forming goals for the upcoming year.
It’s critical to review the numbers behind your company’s performance. Numbers can tell a lot about how well you’ve been doing well and what kind of future success is in store for the future. Make sure to collect data year-round to make sure you can measure your success at the end of the year. Most importantly, it allows you to celebrate a job well done!
2. Areas to Improve
Once you’ve covered your companies’ accomplishments, it’s time to look at areas to improve. The key to successful goal setting is looking at what you did well this past year and how can we improve on that next time.Your objectives might remain the same or shift based on your successes/failures. You can evaluate different parts of your company, such as customer service and acquisition, employee satisfaction, organizational processes, and even company culture. There’s always room to improve, even if you had a successful year, and evaluating those areas for progress will help with overall company growth moving forward.
Next, it’s time to identify company priorities for the following year. You can break your company priorities into three categories: critical, important, and desirable.
Critical priorities: A critical priority is an objective that must be accomplished within a specified amount of time, no matter what. For example, it might be critical to win a new business from a significant customer or move into a new location by a specific day. When deeming a priority as “critical,” it means more time and resources should be allocated to accomplish the identified benchmarks.
Important priorities: An important priority, on the other hand, is an effort that can have a significant positive impact on performance. For these initiatives, resources are fixed, and the variable is either time or the objective. A great example of an important priority is hiring new employees or bringing a new team member into leadership.
Desirable priorities: A desirable priority is an effort in which resources and time are both variables. The organization desires an outcome but cannot commit specific resources over any specifiable time period. For example, some companies may consider running advertising or offering a new service as a desirable priority.
After establishing priorities, you’ll want to use those priorities to set goals for the upcoming year. Aim for SMART goals: specific, measurable, achievable, relevant, and time-bound. Setting goals will provide leadership with a north star they can turn to throughout the year as they execute their work, giving you a useful performance benchmark down the line. When setting these goals, look back at your key performance indicators to measure each goal effectively. Some questions you can ask yourself when setting each goal is:
Specific: Can you explain your goal clearly to your staff? Say your overall goal is to boost market share and increase revenue. What are the specific actions you can implement to move toward those goals?
Measurable: Will you be able to track how far along you are toward achieving your goal? Say your goal is to boost customer satisfaction: What metrics will you use to track customers’ feedback about your product or service?
Attainable: Based on your resources, industry, and competitors, are you able to achieve your goal?
Realistic: Have you considered all the factors that will affect your ability to reach your goal? What obstacles do you face? Do you have sufficient resources?
Timely: Have you set a timeline for your goal? Will you be able to attain your goal in a reasonable amount of time?
Finally, make sure to incorporate follow-up discussions in your review process. It’s easy to celebrate the end of review season and put this information on hold until the following year, but these takeaways will be more powerful if you have a chance to revisit them throughout the year. Aim for follow-up meetings with your leadership team at least quarterly to reevaluate goals and priorities for the best shot at another successful year.
As you can see, year-end reviews have the potential to help your company flourish in the new year. This is also a great time to review employee benefits and new solutions for employee retention. Learn how Merritt Business Solutions can help with all your HR needs in 2024 here.