Performance Reviews and Addressing Skill Gaps

What is a Performance Review?

A performance review is a formal evaluation in which management assesses an employee’s work performance, recognizes their strengths and flaws, provides comments, and establishes performance goals for the future. Performance appraisals and assessments are other terms for performance reviews.

Performance reviews, when done correctly, can assist employees in understanding what they’re doing well, how they can improve, how their work fits into bigger corporate goals, and what is expected of them. Managers that properly use performance reviews can more quickly identify high-performing staff, address issues before they become insurmountable, clearly explain expectations, promote growth and development, and create greater employee engagement.

How to Complete a Performance Review: A Step-by-Step Guide

HR managers can use performance reviews to create goals and track progress. We’ll take a step-by-step approach to this procedure, going from setting goals through writing the performance reviews itself. Technology can help you organize your processes with internal or remote teams, but without a framework, it’s pointless.

1. Set Objectives

At the start of every year or whenever a new employee joins the company, it’s important to get together and set objectives for measuring the performance of every company employee.

The SMART framework is the best way to do this to ensure that each objective meets the following criteria:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Timely

For example:
Gain ten new clients in the next six months by organizing five professional events. This will boost the brand’s business and gain more visibility.

  • Specific: Gain new clients.
  • Measurable: Gain ten new clients.
  • Attainable: Gain ten new clients by organizing five professional events.
  • Relevant: Doing so will increase business and help the company gain visibility.
  • Timely: The goal will be completed within six months.

2. Set Clear Expectations

Pr-review sessions with each employee are necessary to identify objectives beforehand and explain the evaluation process, penalties, and so on. According to Dick Grote, author of How to Be Good at Performance Appraisals, “This immediately improves performance since all employees know what their manager expects of them. This gives you the right to hold each person accountable at the end of the year.”

3. Define the Key Performance Assessment Indicators

Performance evaluation indicators must be identified before selecting how to conduct a performance review. These are important indicators that help you quantify the quality of your employees’ work, and these established metrics will correspond to the competencies that will be evaluated at the performance review.

4. Notify Employees so They Can Prepare for the Review

Schedule the performance review in advance, and two weeks before the face-to-face meeting, ask the employee to jot out items they’re proud of from the previous year. They will be able to refresh their memories as a result of this, and doing so will, as Grote says, “add a positive approach to what is sometimes considered as a negative experience.”

One hour before the meeting, send a copy of the appraisal to the employee. They will be better equipped to focus at the time if they have time to digest it discreetly. “When people read other people’s opinions of them, it’s normal that all kinds of emotions will arise,” says Grote. Giving them an opportunity to process those emotions privately will help the review go more smoothly.

5. Set a Tone for the Appraisal

If there is no clear message, the individual being evaluated may become perplexed as to whether they are performing well or not. Grote encourages us to be direct: “Most people are good professionals, so we should concentrate on the things they have done well,” he explains. This strategy, according to experts, tends to motivate people who are already competent at their jobs.

6. Ask the Employee to Share a Self-Assessment

Another goal of these discussions is to encourage employees to think about their own performance and submit a self-evaluation. This not only makes people feel like they have something to say in the meeting, but it also makes them reflect on what they’ve done in the previous twelve months.

We can send employees a series of questions to answer as a guide:

  • How have the past twelve months been for you?
  • What were your main achievements?
  • What are you most proud of this year?
  • Which tasks or projects have you found the most satisfying?
  • What did you most enjoy?
  • What were the main challenges?
  • What were you most frustrated or disappointed by?
  • In which areas do you feel you have the most potential for growth?
  • What do you expect from this appraisal?

If the employee has particular issues or problems that demand a separate discussion, it’s best to schedule a meeting just for those concerns. In this meeting, it’s critical to stay focused on the evaluation itself.

7. Use Constructive Criticism During the Appraisal

Constructive criticism is an assessment given with the intention of helping another person. The aim is to encourage a positive change that brings benefits, in this case, to both parties.

As we mentioned previously, it’s essential to get to the point. Take this example from the Harvard Business Review:

You shouldn’t say, “You’ve got to be more proactive.”

Instead, the most appropriate thing to say would be: “You should take more initiative and call potential clients to generate more business.”

The first remark appears to be a complaint. However, with the second, we are assisting the employee by stating that they must improve while also providing a remedy.

8. Structure the Performance Review Conversation

The framework of the dialogue must be carefully considered when selecting how to conduct the performance review. The reviewer is in charge of the meeting, and thus, they must be in command.

The meeting should often begin with a discussion of the review’s findings and offer a chance for the employee to conduct their own assessment (based on the questions we mentioned previously). It’s also critical to review the goals set for this time period as well as the results gained.

9. Conclude the Meeting by Outlining Actions to Be Taken

The last part of the meeting should focus on setting the employee’s next objectives. Both parties should agree on goals for the next period according to their performance.

Use the SMART method to obtain specific results that encourage actions through measurable and realistic tasks. It’s essential that the employee knows what’s expected of them during the next period and what they have to do to achieve it.

10. Summarize the Performance Review in Writing

It is essential to document the results of the performance review as well as the mutually agreed upon steps to be taken for the next goal.

Here is an example performance review summary:

Ana is exceeding our expectations in her junior role. She has a positive attitude, works well under pressure, and always takes care of the finer details.

Ana works well in a team and shows leadership among her younger colleagues. She has volunteered to take part in different projects and developed good relationships with many clients.

Ana has strong communication skills and is keen to advance her career. She would benefit from a training and development plan to broaden her knowledge of legal and financial areas.

How to Identify and Address Skill Gaps

A skill gap is the difference between what an employee already knows and what they need to know in order to complete a certain task or meet a certain benchmark. The sorts of skills required for the job and the skill gaps that may exist will differ based on the job.

Here are five approaches that you can use to gather data, assess your employees, and identify skill gaps:

1. Key Performance Indicators

In any business, key performance indicators (KPIs) determine how a person contributes to the business as an employee.

KPIs are the best sources to use in order to identify a skill gap.

These isolated instances can be immediately remediated with appropriate interventions.

2. Employee Assessments

Assessments are excellent ways to identify skill gaps. Tests and quizzes are common methods of assessment, but other methods include practical assessments or role-playing activities.

3. 360-Degree Reviews

Another helpful approach to help identify skill gaps is through feedback. There is an appraisal method called the 360-degree review, wherein feedback on employee performance is solicited from peers, managers, and direct reports. Sometimes, this type of review also includes customers, clients, and vendors.

More importantly, the 360-degree review approach is also a good way of getting qualitative data when conducting a skill gap analysis. We all know that numbers do not tell the entire story, and so one of the best ways to identify skill gaps and training needs is to directly ask those who are involved with business operations.

4. Observations

There is a management concept that posits that in order to understand the most common issues in the workplace, you need to spend time on the front lines. This practice is quite useful, as it gives you a firsthand experience of what’s going in an employee’s work environment.

Firsthand observation helps you conduct a skills gap analysis. Through observation, you can find the “missing pieces” — information not usually found in KPIs and employee feedback—to help you piece the skill gap puzzle together.

Observations also give you (or the management) more insight into the real situation. There are even some instances where you might discover vital information or root causes that aren’t easily visible to the staff.

5. Performance Benchmarks

Another approach to identify skill gaps in the workplace is by bench marking the performance of the organization’s top performers. This sets a point of reference on what the needed skills for success in the workplace are.

Observation is usually the main activity used when bench marking top performers. This process draws out the best practices from your “A employees.” It also indicates the ideal competencies at work. These, in turn, can be used as skill gap analysis templates, such as an employee profile for soft skills in the workplace, for example.

As part of a short-term strategy, you can compare the skills of employees identified as having skill gaps with that of the template. You can then base the appropriate interventions and training programs from there.

As part of a long-term strategy, you can base the entire employee cycle on that proven skill gap analysis template. You can focus hiring efforts based on that bench marked profile and can also train and develop the skills as dictated by the rubric. Then, you may assess performance using the template and reward employees that exemplify the bench marked skills.


Phidelia Johnson is a global Human Resources Practitioner with eighteen years of leadership success. With a focus on streamlining Human Resources administration, she’s well-equipped to find the right solution to a myriad of concerns. Her experience as a commercial business leader gives her a unique ability to advocate for both the employer and the employee.

In her down time, Phidelia is a master of her kitchen, creating wonderful dishes filled with passion and flavor. If she’s not cooking delicious food, she’s stretched out with a good book. She hopes to use her experience to help others, guide company leaders to best practices, and help build better professionals and stronger organizations.

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