A performance review in an SME is a structured conversation, once or twice a year, in which the employee and their manager compare the work done with the objectives agreed at the start of the period and decide what changes next. To work, it needs clear objectives, criteria that can be observed, more than one point of view and a written action plan at the end.
In small and medium-sized companies, reviews tend to fail for lack of method rather than lack of goodwill. Objectives sit in an email from January, each manager keeps notes in a different file and, by the time the conversation comes round, nobody quite remembers what was agreed. The result is a meeting about impressions, which leaves the employee unsure of what is expected of them.
What is a performance review and what is it for?
A performance review is a periodic record of how each person delivered what was expected of them over a defined period, measured against criteria known in advance. It serves three purposes.
- Alignment. The employee understands what matters to the organisation and what to prioritise in the next period.
- Development. Gaps turn into a concrete plan, whether training, mentoring or new responsibilities.
- Decisions based on facts. Promotions, role changes and bonuses rest on a written record rather than on the memory of whoever decides.
A review does not replace day-to-day feedback. If the first time someone hears about a problem is at the annual meeting, the process has failed before it began.
Which models exist, 90, 180 or 360 degrees?
The difference between the models lies in who reviews. An SME does not need to start with the most complete one, and many teams gain a great deal simply by moving from one opinion to two or three.
| Model | Who reviews | When it makes sense |
|---|---|---|
| 90 degrees | The line manager | Very small teams and a first review cycle |
| 180 degrees | The line manager and the employee, through a self-assessment | Most SMEs, as a starting point |
| 360 degrees | The manager, the employee, peers and sometimes clients or direct reports | Coordination roles and project work with several managers |
In companies that work by project, such as consultancies, agencies and engineering firms, the same person often reports to two or three project managers over the year. In those cases, listening only to the formal line manager leaves out much of the work, and having several reviewers gives a fairer picture.
How to run the review, step by step
- Decide what the cycle is for. Development, promotion or bonuses. The answer changes the weight of each criterion and the way results are communicated.
- Agree objectives at the start of the period. A few of them, written down and measurable, agreed with the employee rather than simply handed down.
- Choose the criteria and the scale. Results, meaning what was delivered, and behaviours, meaning how it was done, with a short scale and a description of what each level means.
- Choose the reviewers. The line manager, the self-assessment and, where relevant, the managers of the projects the employee worked on.
- Gather evidence throughout the period. Deliverables, deadlines met, hours per project and follow-up notes. A review written from memory always gives too much weight to the last two months.
- Prepare and hold the conversation. The self-assessment arrives before the meeting, every rating comes with concrete examples and there is time for the employee to respond.
- Close with an action plan. Two or three dated commitments, which become the objectives for the next cycle.
A cycle built on these steps does not need long forms. One page per person, with the objectives, each reviewer's notes and the action plan, is enough for most SMEs.
What is the difference between a performance review and OKRs?
OKRs, objectives and key results, state what the team and each person want to achieve in a quarter or a half-year, with results that can be measured. A performance review looks back and brings together what was delivered and how it was done.
The two complement each other. OKRs give the review its objectives and figures for the period, and the review adds what the figures do not show, such as collaboration, autonomy or the quality of the work. Many organisations prefer not to tie OKRs directly to bonuses, so that targets stay ambitious and are not chosen because they are easy to hit.
A practical example in an engineering firm with 30 people
Imagine an engineering firm with 30 people in four teams, where each engineer works on three or four projects a year under different project managers. Until now, reviews were done in December by each team lead, on a spreadsheet form, and project managers were never asked for their view.
In the new cycle, each person's objectives are set in January and linked to the team's OKRs. In July there is a half-hour mid-year conversation. In December, each engineer completes a self-assessment and is reviewed by their team lead and by the two project managers they worked with most. The hours logged per project show where the year actually went, so nobody has to argue from memory.
In this example, the final conversation is about facts rather than impressions, and each person's action plan is written down in the same place where next year's objectives will sit.
How Engi360 organises reviews and OKRs
Engi360 is the Engibots operations management platform for teams that bill hours or run projects for clients. Performance reviews live in the people module, alongside employee records and OKRs, on the same platform and with the same operational data.
- Reviews with multiple reviewers. Each performance review can bring together multiple reviewers and comes with AI support.
- OKRs in the same place. Objectives and key results sit in the administration area, next to HR and payroll preparation.
- Employee portal. Each person finds their reviews in the portal, together with their tasks, the knowledge base, documents and payslips.
- Operational evidence. Hours and timesheets per task and the project velocity and workload dashboard are on the same platform and give the conversation a factual basis.
The Free plan costs 0 euros, with the whole team for the first 14 days and then up to 3 users, no credit card required, and includes the base modules, such as hours, holidays and absences, and projects. Reviews and OKRs are part of the paid plans, from Professional upwards, which costs 7 euros per user per month on annual billing. To see how the platform brings a team's operations behind a single login, the article on centralised operations management explains the model.
Frequently asked questions
What is a performance review?
It is a periodic record of how each person delivered what was expected of them over a defined period, measured against objectives and criteria known in advance, and it ends with a conversation and an action plan.
How often should an SME run performance reviews?
The most common rhythm is an annual review with a mid-year conversation. In teams that work by project, it can also make sense to add a short note at the end of each project.
What is the difference between 180-degree and 360-degree reviews?
In a 180-degree review, the line manager and the employee take part. A 360-degree review adds peers and sometimes clients or direct reports, which gives a fuller picture but takes more organisation.
Do OKRs replace performance reviews?
No. OKRs set and measure the objectives for the period, and the review combines those results with how the work was done. The two are used together.
Does Engi360 include performance reviews?
Yes. The people module includes performance reviews with multiple reviewers and AI support, and OKRs, on the paid plans from Professional upwards. The Free plan includes the base modules.