Performance Development Review (PDR): The Complete Guide

employees during a PDR

A performance development review (or PDR) is considered to be a critical part of a mature performance management cycle. But, what is it, how does it work, and how does it help your employees grow in their role — moreover, how does it help your organization succeed? Let’s get into it.

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What Is A Performance Development Review (PDR)?

A performance development review, also known as a personal development review, or PDR, is a formal process used by many businesses to help employees set SMART goals (Specific, Measurable, Achievable, Realistic and Time-Bound) and work towards achieving them.

Scheduled to take place as infrequently as once a year, or as frequently as once a month, PDRs provide a helpful and documented snapshot in time about how well an employee is doing.

Dive into the four key stages of a performance management cycle right here.

What Is The Purpose Of PDRs?

PDRs are an important part of many organizations’ employee development plans, and can form a key part of a strategic HR approach to hiring, motivating, and promoting employees. When HR team members use PDRs as part of their performance management processes this can benefit employees’ careers, and evolve your organization. 

So why are PDRs important? In essence, when PDRs are done well, they don’t just help companies set meaningful and clear objectives for employees, they also provide a framework to understand what employees should focus on, and how they can excel.

A good PDR also provides a regular, confidential basis for employees to speak with their line managers about where they’re struggling, and how they can get help.

PDRs help both employees, and managers communicate clearly, and set realistic expectations, about:

  • Corporate goals, and how personal objectives align with the bigger picture.
  • Opportunities for career development, or career progression.
  • When an employee might be entitled to a bonus, promotion, or even have to face compulsory redundancy.
  • Help employees know whether they stand and how well they’re performing.

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Why Do Both Managers And Employees Often Dread Doing PDRs?

A PDR can also provide an indicator of job security and longer-term prospects with the company. That’s partly why PDRs are often both eagerly anticipated, and feared, by employees and bosses alike.

Bosses are often frustrated by the leg-work that goes into reviewing employee performance – particularly when it’s been a while since their last appraisal or PDR, or when they don’t exactly know what their employees do on a day-to-day basis.

Employees are also often not fond of documenting their achievements because:

  • If PDRs take place too infrequently, it’s not always easy to remember accomplishments between one and the next.
  • There’s a balance to be struck between honesty and the desire to exaggerate or amplify one’s own importance, in achieving company-related goals.
  • The metrics are not always available, could be interpreted in different ways, or it may be difficult for employees to explain how they contributed to achieving these broader goals.

So, while PDRs are important, they’re not often very popular.

That’s why it’s even more important to do them regularly and to ensure that PDRs are used as a part of a structured career development framework. It’s not fun, but it’s important – the evidence agrees.

Research by Robert Walters revealed that nearly two-thirds of UK professionals (60%) consider career development to be an important part of their initial job offering. But, often, once employees are forging ahead with their work and managers are preoccupied with other tasks, everyone forgets that employees want to learn, progress and evolve.

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How Do PDRs Differ From Staff Appraisals?

Often, the terms professional development review, personal development review, development review, performance review, or appraisal are used interchangeably. 

In the UK, HR Grapevine explains that the term ‘performance review’ is more commonly used in the public sector and not-for-profit sector, and the term ‘appraisal’ is more common in other business sectors.

But is there really a big difference between a PDR and an appraisal? Yes, and no. 

Generally, both terms are acceptable. If you want to be pedantic, performance reviews tend to focus on development, while appraisals are more about whether objectives were achieved or not. 

In other words, organizations that use the term ‘performance review’, or PDR, tend to be more people-focused than goal-focused. They use PDRs as a helpful, forward-looking tool to help employees and organizations make improvements in the future.

However, companies who use the term ‘appraisal’, tend to see the tool as serving a more linear, or backward-looking purpose. “Did you achieve the goal or not?” only allows for a yes or no answer. Giving this answer makes it easier to allocate bonuses, but may run the risk of demotivating employees, leading to longer-term reductions in productivity.

Here are the four most common mistakes when it comes to performance reviews.

What Happens In A PDR?

In a typical PDR, managers and employees sit together in a 1:1 setting and go through a list of agreed questions that they have answered separately, in order to compare their answers, address differences, review achievements, and discuss next steps.

As we cover in our free guide to performance reviews which you can download here – it’s good to start with a template so that you can ensure PDRs happen smoothly. This helpful document includes information about:

  • How to ensure you have a productive atmosphere
  • Why it’s important to explain the reason for the review
  • How to look back together
  • The evaluation and consultation procedures you should use
  • What you should ask your employees
  • How to agree on objectives and decide on a course of action
  • Why it’s important to finish on a positive note

And, ultimately, how the Personio can help streamline these processes, make HR more agile, and unleash your workforce’s true productive potential through HR.

Why Do PDRs Matter For Employee Performance?

When managers and employees have clear lines of communication, are clear about their daily tasks, challenges, goals, and frustrations, PDRs shouldn’t be feared! 

The whole idea behind staff appraisals or PDRs, whatever you choose to call them, is to provide an opportunity for managers to discuss issues beyond the day-to-day, and help employees look ahead to the future.

Good PDRs help facilitate an exchange of ideas between a manager’s expectations, plans, and goals (including, but not limited to, any monetary goals), and the employees’ goals.

Unfortunately, when PDRs are handled badly, they can inspire fear, and aggravation for both parties. That’s why there’s a big difference between PDRs that are treated as a box-ticking exercise, and PDRs that are genuinely conducted with the intention of helping both employees, and managers learn what’s going on, what should be celebrated, what could be going better, and what needs to be fixed.

And that’s also why we provide this helpful template for performance appraisals – so you can ensure fairness and comparability by using it consistently for staff, and help improve acceptance of the results – good or bad.

Employees who are motivated, and believe that their professional development goals are met, often go on to achieve great things – contributing both to their own, and the organization’s success.

On the other hand, when employees are not meeting their goals or targets, it’s important to ensure that their lack of performance can be managed appropriately – often by using a performance improvement plan (PIP). 

If you want to go beyond a simple PDR or appraisal, sometimes the best way of getting a balanced view of an employee’s performance is by conducting a full 360 degree review – which allows them to get feedback from people above, below, and on the same level as them in an organization. These are usually time consuming, but are often incredibly valuable for the employees who undertake them as we explain in this blog post: What Is 360º Feedback and Why Does It Matter for Staff Performance?

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How Do You Build A PDR Framework?

Some of the key reasons for the general frustration with PDRs comes as a result of uncertainty, unrealistic expectations, or the consequences of what happens when promises are made, and not kept. As we explain in this article, The Psychological Contract: How And Why It Works, even though there’s no dotted line that employees sign in a psychological contract, they are key to ensuring that a set of promises made by an organization, and adhered to by its employees, are met.

As we touched upon earlier, a key way of doing this is by crafting a performance management process. In our Five Step Guide To Improving Performance Management Processes, we take you through the definition of performance management, the role of company culture, how to do performance management (with examples), consider the role of remuneration (it’s not everything!) and more. It’s worth a read. 

How Can HR Conduct A Great PDR?

Once you’ve created a great PDR framework, either by starting with a template for performance appraisals, the seven-step process we show above, or by using the advice from our free guide to performance reviews, the next step is actually conducting the PDR.

As we discuss in the Personio HR Lexicon article, How Can Constructive Feedback Boost Employee Motivation? one of the best ways of ensuring employees respond well to what’s said in a PDR is by giving them appropriate recognition, as well as constructive feedback.

Everyone loves getting recognition. Mark Twain is believed to have said, “I could live for two months on a good compliment”, and it’s easy to understand why. Compliments make us feel appreciated, release positive endorphins like serotonin, dopamine, and oxytocin, and are an important motivation tool. Sadly, research by officevibe showed that while 63% of employees feel like they don’t get enough praise, 83% of employees think it’s better to give someone praise than a gift!

Managers often want to give praise, but don’t have the time or the right framework (like timetabled PDRs, as part of a mature performance management cycle). Officevibe’s research from more than 150 countries, across 1,000 organizations, covering 1.2m research points showed that, unfortunately, 32% of employees have to wait more than three months to get feedback from their manager.

We believe that’s not good enough.

Employees crave feedback. Their research says that 83% of employees really appreciate receiving feedback, regardless if it’s positive or negative. A great PDR needs to address employees’ human failings, and show how improvement can be made, too. In this way, they can become a very useful tool for future success.

How Can HR Software Help With PDRs?

In short, research shows that regular PDRs are critical. 31% of employees wish their manager communicated more frequently with them, according to research conducted in May 2021 – one of the ways to formalize this communication, and enshrine it in the HR calendar is by scheduling regular PDRs.

When the time comes to do PDRs, it’s far easier to have a solid starting point by using common, indisputable facts or metrics. That’s why the CIPD factsheet on appraisals says that reliable and relevant data can be a valuable source for performance reviews. When the data is available through real-time dashboards, that’s even better.

Fortunately, HR software like Personio can help with PDRs. Our one-stop HR solution includes automated processes, allows for seamless integrations, and creates data-driven insights. Using a tool like Personio makes it possible for line managers to have an employee’s performance data available at their fingertips but, more importantly, it makes core HR as simple as possible.

If you’d like to find out how Personio can help improve HR for your business, book a demo. Or just get in touch – we’ll be happy to answer any questions you have about making HR easier for you.

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