Impact of Performance Review on Employee Morale, Retention, and Improving Business Operations

Performance evaluations are important tools that enable the management review the performance of employees. They are a common feature of most contemporary organizations. Organizations may use different types of performance evaluations. Performance review enables the management to have one-on-one chat with employees of the organization. This enables the management to discover the skills the employees may possess or interests in a certain area of the business. This enables the management to assign the employees to roles that would enable them add value to the organization. This helps in improving the operations of the business. In addition, if the organization undertakes the performance review in an efficient manner, employees would respond favorably. On the other hand, if the organization treats performance review as a necessary evil, it may have a negative effect on the morale of employees. Therefore, it is vital for an organization to ensure that performance review is an integral part of the organizational culture. This ensures that employees respond positively to the performance review, which leads to improvement of their morale (Smith & Mazin, 2011). The major aim of performance reviews is to determine weaknesses in the performances of employees. This enables the respective manager to determine methods that would enable the employees increase their performance. Using the performance review for this purpose helps in improving retention of employees as the managers act their mentors (Liebowitz, 2008).

In some instances, the managers evaluating employees may have negative bias towards certain employees. This may be intentional or unintentional. Managers usually favor employees who portray personalities that are similar to theirs. Bias may make the manager focus more on the personality of the employees instead of their performance. This may make high performing employees of the company feel at risk, which increases tension in the workplace. This reduces their morale. In addition, the employees may opt to resign if the workplace environment is not favorable. If employees who perform roles that are critical to the organization resign, the operations of the organization may be crippled (Liebowitz, 2008).

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