It's not enough for HR to recruit, train, develop, and motivate employees. It is also important for employees to be assessed or reviewed to know how they are doing. Read this section to learn about some methods for employee performance review.

Key Takeaways

  • Managers conduct performance appraisals to evaluate work performance, usually following a three-step process:

    1. Setting goals and performance expectations and specifying the criteria for measuring performance
    2. Completing written evaluations to rate performance according to predetermined criteria
    3. Meeting with employees to discuss evaluations and ways to improve performance
  • Turnover – the permanent separation of an employee from a company – has a negative effect on an organization.
  • In addition to offering competitive compensation, companies may take a variety of steps to retain qualified employees:

    1. Providing appropriate training and development
    2. Helping employees achieve a satisfying work/nonwork balance in their lives
    3. Creating a positive work environment
    4. Recognizing employee efforts
    5. Involving employees in decision making
  • On the other hand, employers may have to terminate the employment of (that is, fire) some workers.

    1. They may lay off workers because revenues are down and they have to downsize – to cut costs by eliminating jobs.
    2. Sometimes a job is phased out, and sometimes an employee simply fails to meet performance requirements.
  • If there's no written employment contract, the employment relationship falls under the principle of employment-at-will, by which an employer can end it at any time. Usually, however, the employer must show just cause.