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The Importance and "How Tos" of an Effective Performance Review
- Scott Munden
- Apr 1
- 5 min read
When I managed employees, I always made sure to build employee performance and salary reviews into my annual workflow. I considered it to be effective people management. Initially, I was struck by just how hungry my staff was for those reviews. Contrary to assumptions, staff do like feedback and a performance review is a perfect opportunity to quietly sit down together and to have a review which, in my case, was highly conversational. I wanted the employee to feel comfortable. I wanted them to feel they were in a safe environment and free to express themselves.
So, what does an effective performance review look like? What steps should a manager take to prepare?
Advance Preparation
Review Employment Agreements:
Confirm job descriptions, agreed-upon responsibilities, and contractual terms (hours, salary, benefits).
Check local labour laws (e.g., minimum wage, overtime rules, paid leave) to ensure compliance. Labour laws tend to change over time, so it's best to check on key details, because if the manager isn't doing it, they can be sure the employee is.
Gather Feedback:
Note specific examples of performance (e.g., punctuality, quality of work, reliability, adaptability).
Get feedback from family members and, when appropriate, work colleagues.
Research Market Salary Rates:
Whatever you do, avoid Internet search results. They are invariably far off the mark. Instead, consult your network to gather their opinions, even if it is simply to confirm your own.
Understand the cost of living (housing, groceries, expenses related to vehicle use, etc.). Be mindful of not falling below fair market salaries for domestic staff. It's a competitive labour market out there.
By low-balling a salary increase, a household runs the risk of having a valued employee poached by another household. I can assure you that talented private service professionals are receiving communications regarding job opportunities on a regular basis. It isn't a question of an employee's loyalty. It is a matter of self interest and a desire to improve the quality of life for the employee and their family.
2. Schedule Thoughtfully
Choose a Private, Comfortable Setting:
Avoid conducting reviews in shared family spaces; opt for a quiet, respectful, and private environment. The objective is to help the employee feel safe and comfortable.
Provide Advance Notice:
Inform the worker about the meeting’s purpose (e.g., “to discuss your work and compensation”) to reduce anxiety. In my experience, employees often entered the room nervously. If the review is conducted correctly, those nerves will quickly dissipate.
3. Performance Review Meeting
Always Start with Positives:
Launching into the negatives is a sure way to derail a review.
Acknowledge contributions (e.g., “We appreciate how you’ve kept the house organized during busy weeks”).
If a review was conducted the previous year, use that year as a benchmark to help identify performance improvements.
Use Specific Examples:
Focus on observable behaviours. If, for example, the employee was told the previous year to step away from petty staff conflict (it will always occur) and they have successfully managed to do so, let them know that you, as a manager, have observed their successful efforts to avoid staff squabbles and focus on their duties.
Let them know that their efforts have both improved productivity and helped to create a more peaceful household environment that has been noticed by the family.
Address Concerns Constructively:
Frame feedback empathetically and not aggressively. For example; “I would like to discuss ways to improve and help you to organize your work responsibilities to improve efficiency." Make sure they know that the plan is to work collaboratively. An employee who feels supported is generally a happy employee.
Ask for Their Input:
Encourage them to share challenges or suggestions. For example; "Is there anything we can do to help you in your job?" or "What are some areas you feel that you have improved on over the last year?"
Employee feedback is critical for so many reasons. For example, it builds teamwork, it reinforces that they matter to the family and their opinions are respected, it maintains lines of open communication, and it provides the manager with an opportunity to improve how they are doing their job.
4. Salary Review
Link to Performance:
Explain how their work influenced the salary decision. Identify the factors that were considered in any salary increase.
Review any non-salary related perks like medical benefits, a retirement savings plan, or an annual bonus.
Be Transparent About Constraints:
If raises aren’t feasible, explain why and offer alternatives (e.g., a one-time bonus, additional paid time off, etc.). I do highly recommend that, at minimum, a cost of living increase be included in the review. An employee will compare their work environment and the way their employers live to not receiving an increase. Invariably, the conclusion they draw will not be positive.
Adjust for Market Changes:
If local rates for domestic workers have risen, align salaries accordingly to retain talent. I had an employer who would always tell me to research the market and recommend a number that is above market rate. The employer was smart. They knew how easy it is to lose talent to another employer.
5. Follow-Up
Document Agreements:
Document what was mutually discussed in the review. File that information as a benchmark tool for the following year's review.
Always give the employee a goal to work on over the upcoming year. Once again, it provides the manager with an opportunity to reference the previous year's goal and the extent to which it has been achieved by the employee. Make sure to document the goal.
If it is necessary to update contracts in writing (e.g., revised duties, schedule, or title) for both parties sign, depending on the circumstances, it might make sense to incentivize the employee with a one-time signing bonus. It needn't be extravagant. It should be aligned with the changes being made.
Provide Regular Feedback:
Schedule informal check-ins every few months to address concerns before they escalate.
Reinforce that, while reviews occur an annual basis, that your door as a manager remains open to the staff member.
Key Considerations
Cultural Sensitivity:
Respect cultural norms and avoid assumptions about a staff member's personal circumstances. People communicate and receive communications differently. Sometimes it is related to culture and other times it's a matter of a specific personality trait. The manager should adjust their communication style so it aligns with an employee's expectations. Failing to do so invites the potential for misunderstanding.
Legal Compliance:
Ensure compliance with local labor laws. Remember, labour laws frequently change, and in the event a matter related to labour law comes up during an interview, the household manager should be prepared to the best of their ability. If the manager does not know the answer to a question or issue, say so. There is no loss of face in that. Simply let the employee know that you don't know but will find out and get back to the employee. But, remember to follow through on the promise.
Privacy:
Keep discussions confidential in the sense that what is discussed during a review is not discussed with any other staff member.
Etiquette:
Always thank the employee for their time. In a home etiquette is important. A manager sets the example.
By balancing professionalism with empathy, a household manager fosters trust and loyalty while ensuring fair treatment for domestic staff. Don't forget those annual reviews. Enter them into your calendar. If the household manager doesn't remember to conduct them, it will be noticed by the household staff and potentially undermine the manager's role within the household.
© 2025, Portico Inc.
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