Welcome to our short spin on why you need to take your next performance review seriously.
Firstly, there are many names for a performance review, your organisation may call them; PDR (Performance Development Review), Development Review or just a yearly catch up. Regardless of the name, there are a number of reasons why you should take them seriously.
This is your chance to show what you have done through the year and how you have gone above and beyond!
You are given the opportunity to address any shortcomings in your performance. If this is done well in a one-on-one scenario, there is no reason why this can’t be a productive discussion with meaningful achievable outcomes. Top tip, it is best to reflect on your own regarding your shortcomings prior to heading into your performance review.
KPI’s are key! Review your yearly Key Performance Indicators and ensure you have tangible examples of each to prove you have met your goals with metrics.
Performance reviews are not a time to focus on the negative, but rather the opportunity. Don’t see this as a punishment session, rather see it as an opportunity for growth.
This is your opportunity to provide input into your own development. Prior, do some research on training you may wish to undertake in the coming year. A good performance review should be as much about the coming year as the performance in the year passed.
Also, try to get your hands on the position description for the next step up the corporate ladder and do a gap analysis against your current skill set. This will be the best place to start for a development plan in career progression.
Pay raises don’t come easy! Generally, there will be a standard ‘corporate-wide’ pay increase, however, there is usually a little room to move for those that under-perform and those that exceed expectations. To give yourself the best shot at being seen as someone who ‘exceeds expectations’, take time to prepare for your performance review. We can not stress this enough!
As you can see from the compounding example below, it is important to chase this pay rise every year.
Download our free performance review report and start preparing now.
Now is your chance to discuss your promotion aspirations with your line manager. Take a look at the department organisation chart as a good starting place. Your aim should be to find out what the next role is for you and set your own expectations for when you should be ready to take this position.
Try to have an open discussion with your line manager about your aspirations and take note of where they see you in relation to the new role i.e.What timeframe would they expect for you in order to reach this new role? What do they see as the development areas you need to focus on?
If your organisation has a bonus structure chances are it works something like this;
The board of directors will allocate a great big bucket of cash for the entire organisation. This will be passed down through the corporate ladder splitting the pie more and more as you go down through the various departments and levels of management. Chances are your manager would be given a small slice of this pie to distribute to her team within some preset guidelines (such as all employees will get a 2% bonus +/- 1%).
If your boss has a 2% figure in mind when she walks into the room +/- 1% depending on your performance review then this is your opportunity. Doing well will land you a 3% raise whereas not preparing and botching your review could lead to you only getting 1%. This ~2% gap is worth fighting for and worth spending only a few hours preparing for!
“Compounding is the 8th wonder of the world” according to Albert Einstein and here is how it can work for your salary over time:
As a comparison between two employees who start at the same salary. The first employee prepares well and scores a 3% rise year in and year out just by taking two hours of the company time to prepare for her performance review. The second one doesn’t prepare for her pay review and gets a lowly 1% pay rise each year.
The results are in the table below. Within the first 10 years, we can see a yearly salary gap of close to $12,000, however, getting close to a retirement age of 62, we have a profound gap of over $88,000! Over their life span the total earnings are $3.9M Vs $2.5M – yes a whopping $1.4M gap!
Now, we are not saying that this is the only factor but you can see for yourself how the little extra effort (on work time) can really have a dramatic impact on your salary.
As you can see from the above examples there are a lot of opportunities that come from a well-run performance review. Don’t leave it up to your line manager to run your performance review; let them lead it but be prepared and willing to guide where you want the discussion to go. Above all else PREPARE PREPARE PREPARE! Not only is there a great opportunity to increase your salary or pick up a little more bonus but there is a great opportunity to show you are interested in advancing your career.
Please check out the Rapid Mentoring Free Performance Review Report and follow our 10 step guide to Acing your next performance review!
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