Why Performance Reviews Are Good for Business


A Clarity Labs blog.

Google the words “performance reviews” and you’re inundated with blog postings that trumpet their failings and insist that they should be scrapped all together.

There are, however, a number of reasons why performance reviews, when properly administered, are good for business.


Performance reviews that allow managers and their team to jointly set goals create alignment between a company’s objectives and an employee’s deliverables. As Kazeem Jaffer, Corporate Controller says, “Performance reviews mean you and an employee are on the same page, working towards an articulated goal that you agreed upon together.” In this model, performance reviews are employee specific. This means you can tailor the review to help people develop additional skills and take on new projects. As Jaffer says, “they help make company goals relevant to employees.” The result: higher retention and employee engagement and, an increased buy-in to the organization’s vision.

Reflection and Reassessment

Performance reviews also help you track the success of corporate initiatives, allowing you to assess what failed and what worked well. You can then set new objectives, re-evaluating and realigning as needed.

In terms of employee performance, reviews help the company measure which employees are delivering and which ones might be struggling. Leaders can then determine who they want to promote, whose role they want to enrich, or which employee might be in need of more mentoring. Fundamentally, performance reviews allow you to course correct toward a more successful, profitable outcome.

Performance reviews, whose goals are founded in the spirit of joint collaboration, can be a useful tool in creating alignment between a company’s objectives and an employee’s deliverables. When done well they can create buy-in, provide valuable feedback on the success of initiatives and allow a company to redirect its energies if needed. All of this makes performance reviews good for business.