While necessary, the employee performance review has a less than stellar reputation with Canadian employees and managers alike – and with good reason. A recent Gallup poll of Fortune 500 companies found that only two per cent of chief human resources officers (CHROs) strongly agreed their performance management systems inspire employees to improve, while only one in five employees believe their performance reviews are transparent, fair, or inspire better performance.That’s why many of today’s leading Canadian companies have embraced an approach to staff management known as “performance management.” Rather than an annual employee performance review, performance management involves formalizing a casual but continuous process that enables employees to receive and provide regular feedback, helping managers set expectations and employees identify how and where they can improve in order to advance their careers.
While forcing workers and managers through the motions of a traditional annual employee performance review can feel less than useful, underlying goals such as skills development, optimizing employee experience, and identifying candidates for promotions and raises remain important.The key difference between performance management and a rote employee performance review, then, is that the former distills the latter to its essence, its most formal element involving the employee and manager working together to set and document goals.These goals often align with specific metrics or company objectives, like increasing revenue or decreasing expenses, and can cover different aspects of performance. For example, job description goals are those the employee is expected to achieve continuously because they’re outlined in their job description, while stretch goals can help high-potential, highly motivated employees gain new skills and knowledge.Canadian employers that practice performance management should set a few major goals for each employee to accomplish per year. To ensure their effectiveness, the goals that a worker and manager develop together should be created with the SMART framework in mind. That means they should be:Specific, clear and understandableMeasurable, verifiable and results-orientedAttainable, yet sufficiently challengingRelevant to the mission of the department or organizationTime-bound, with a schedule and specific milestonesFrom there, performance management relies on employees and their supervisors casually but regularly communicating throughout the year, to gauge progress toward set goals and readjust timelines and other details as needed. Coaching and education also play a big role in performance management.This process of sharing ongoing, constructive feedback keeps workers and managers on the same page, reducing misunderstandings and any confusion about expected outcomes. It also helps prevent small problems from turning into obstacles to success. Continuous feedback can improve employee engagement and motivation as well, which can help boost productivity and retention.
Canadian organizations that practice performance management don’t typically conduct an annual employee performance review — or at least, not in a traditional way. These conversations still occur as part of performance management - but they are more frequent, usually more informal, and designed to focus on the progress an employee has made toward set goals.If you don’t think a performance management approach is right for you and your team, you may want to rethink your employee performance review process anyway. If you’re evaluating staff performance only once a year, or even twice a year, you’re missing out on many opportunities to guide and motivate your employees and build an even more productive work relationship with them.Also, your team members likely want to hear from you regularly about where and how they’re excelling or should strive to improve. It’s also a good bet they want regular reminders that they’re an important and valued part of your organization. (If your employees have been or are still working remotely, the need may be even greater for you to provide those reminders.)Waiting too long to provide your team members with feedback and encouragement could lead to you losing them, too. Some may already be eyeing the door: Recent research from Robert Half found that 50% of Canadian workers are looking or plan to look for a new job in the coming months.If your organization is reconsidering how to conduct a performance review and decides to conduct them more frequently, here are some strategies for success:
Remember that an employee performance review — even informal check-ins with management — can be intimidating for employees. That’s why it’s important to structure these meetings like two-way conversations. You want to share your feedback, but you also want to invite your employee to respond to it. You want to create an environment where staff members feel they can be open and honest with you, too.So lead with positive intent. Start by highlighting an employee’s recent successes and emphasize the reason for your discussion, whether it’s developing new skills, leading a new project, or developing their skills for a more senior role. Listen more and talk less. Ask your workers to share their thoughts about their strengths and weaknesses, and to offer suggestions for both personal and department-wide improvement. And be sure to listen for hints to their level of workplace happiness and satisfaction.Looking for more employee performance review tips? Check out our blog of end of year employee performance review tips for employees and managers across Canada.
Whether formal or as part of a performance management strategy, keep in mind that an employee performance review doesn’t begin and end on a specific date at a specific time. It starts the moment a worker starts their job, and it’s important that managers pay attention to, make note of, and comment on performance milestones as they happen.Instead of dwelling on past successes or failures during scheduled meetings, managers should focus on the company’s upcoming needs and how the employee fits into that big picture. For example, what technical training might the employee need to make the most of new technology, such as advanced data analytics tools, your organization has implemented as part of recent digital transformation efforts?You may find these one-to-one meetings can help you identify candidates who are good fits for leadership development and succession planning efforts. For your rising superstars, be sure to discuss mentoring and leadership training.
For maximum impact, managers need to ensure that an employee performance review articulates not only where performance gaps exist but why they exist. A big reason more frequent employee performance review meetings can be so effective is the number of opportunities they present to help employees identify areas for professional growth, such as specific skills to enhance or learn.Upskilling is especially important today as technology continues to rapidly change the nature of work. It’s also important for recruiting and retaining younger Canadians: According to Robert Half research, opportunities for career advancement and promotions are among the top five influences on job satisfaction and desire to stay with an employer for both Gen Z and millennial professionals.
Salary plays an undeniably important role in employee satisfaction – according to research for the 2025 Canada Salary Guide by Robert Half, 51 per cent of Canadian employees feel underpaid, and one third plan to look for a new role if their employer does not raise their salary.Many Canadian companies base financial rewards — such as annual or biannual bonuses, merit increases, or retention bonuses — on formal evaluations. That arrangement doesn’t need to change, although you may want to consider separating that conversation from the feedback process. An employee performance review is best used as a time to acknowledge employees’ strengths and discuss strategies for positive change and growth.Use our guide to salary benchmarking to make sure you’re competitively compensating your team.
As a manager, you strive to foster a healthy relationship with your staff and motivate them to do their best work. But an employee performance review process conducted only once a year can be counterproductive in those efforts. Right or wrong, many Canadian workers dread these appraisals because they have not been receiving regular feedback from their boss and are unsure what to expect.Even if you don’t go all in on adopting an entirely new performance management approach, there is value in rethinking the old-fashioned employee performance review. More frequent feedback for your staff and a less-structured format for delivering constructive feedback and specific, timely praise can help keep your team focused on continuous improvement and feeling motivated to excel.
