Chances are, you’ve had to suffer through a terrible or pointless performance review at some point in your career. One employee shared their awful experience with Reflektive, a company centered on people management: “I went in for my 30-day review all excited about all I’d been able to do in a newly created position,” this employee recounted. “I was told that I hadn’t done anything they had wanted me to do, even after he admitted that they hadn’t actually decided what they wanted to measure the position on; they just knew I hadn’t done it.”
Stories like these are sadly far too common in the business world. When the performance review process is poorly defined, employees and managers can become frustrated, progress becomes hard to measure, and work motivation can suffer. In fact, according to Gallup, only 20 percent of employees feel like the performance review process actually motivates them.
When you don’t have a process, many critical elements of an employee performance review can fall by the wayside. Important actions, such as giving valuable feedback, promoting open communication, and outlining clear next steps, are frequently overlooked in discussions.
An effective performance review is the perfect opportunity to evaluate how employees are doing. Without it, your chances of improving the organization take a hit. Conducting quick, unorganized reviews does a disservice to everyone and only serves to keep things as they are, not better.
In this article, learn more about the purpose of an employee review, the skills you should evaluate, some of the best practices to follow for an effective performance review, and what to avoid.
What’s the Purpose of an Annual Performance Review?
A performance review is a process by which a manager carefully assesses an employee’s work to ensure they are meeting all expectations. One of the main purposes behind a performance review is to note the areas the employee is doing well and where they need to improve. Through a performance review, managers and employees can engage in one-on-one conversations face-to-face, with the manager providing constructive feedback. In the performance review, the manager should also set goals the employee can work on. They will then follow up on these goals in the next review.
Managers should focus on performance during these reviews. According to HR consultant Rachel Kleban, while many modern reviews tend to center on growth and employee development, they don’t always touch on actual performance appraisal and fail to answer a key question. “[P]erformance reviews have shifted significantly from being focused primarily on performance toward formats that focus on conversations about growth and development,” Kleban writes. “While this can ‘feel good,’ the result is a performance review system that does not clearly answer the question, ‘Did I perform my role as expected?’ To be successful, performance reviews should not only answer this question, but shed light on why or why not.”
Skills Performance Reviews Should Be Evaluating
During a performance review, managers must know what skills, qualities, and competencies they should evaluate. These skills will largely depend on the organization and individual roles, but all should tie directly into the employee’s performance. The following is just an example of the skills most managers should consider when conducting a review.
How well does the employee work with others? Do they even want to collaborate with team members in the first place? Since 75 percent of employers consider collaboration to be “very important,” making sure employees are proficient in it should be a priority.
Does the employee make good use of their time? Time management has everything to do with productivity. Professor Erich C. Dierdorff from DePaul University advises that project management tools and apps are merely “quick fixes” and don’t actually represent effective time management on their own. Instead, he explains that time management is “the decision-making process that structures, protects, and adjusts a person’s time to changing environmental conditions.” Managers should look at time management skills through that lens.
How much does the employee take accountability for their mistakes? An employee who performs well should display total ownership of their tasks and responsibilities. As Jocko Willink taught in Extreme Ownership: How U.S. Navy SEALs Lead and Win, “Extreme Ownership is a mind-set, an attitude.” Employees should take the initiative to hold themselves accountable. This remains true for every performance review, especially for a manager performance review.
How well does the employee communicate with their team members? Communication skills are an important part of daily life in the workplace. Employees should strive to continue improving them over time, especially when poor communication can be so debilitating. According to a survey from Forbes Advisor, almost half of employees said poor communication hurt their productivity and job satisfaction.
Does the employee stay organized, even when busy? According to one study, some employees can receive as many as 50 to 100 emails every single day. Even if the problem isn’t that bad, employees need to know how to stay organized so their productivity doesn’t suffer. Employees with effective organization skills will keep on top of things and not allow their to-do pile to reach critical mass.
Best Practices for Conducting an Effective Performance Review
1. Prepare Well Beforehand
If you start preparing for a performance review just days or hours before it takes place, chances are the review will be unproductive. Think about how important a review can be to someone’s livelihood. With this in mind, you know not to take the task lightly. Preparation for a performance review should begin weeks if not months in advance. The more prepared you are, the better the review process will go.
How to prepare a review in advance:
- Communicate what you’ll be going over so employees can prepare themselves.
- Observe your team members with performance reviews in mind.
- Send a questionnaire to employees ahead of time so you know what they would like to talk about.
- Establish expectations early on so no one is surprised.
2. Lean Into Constructive Feedback
When giving a performance review, you should give clear, concise feedback to the employee. Constructive feedback does not belittle or demean. It consists of several different types of feedback, all of which seek to build and correct. An employee should walk away from receiving constructive feedback feeling uplifted and encouraged. If they feel frustrated or disheartened, then the feedback is likely negative in nature.
How to give feedback constructively:
- Focus on how the employee can grow in the future.
- Don’t dwell on past mistakes.
- Be specific in what you say.
- Promote 360-degree feedback to create a culture that builds people up.
3. Conduct the Review Face-to-Face
Few things feel more impersonal than a performance review done over email or a messaging platform. An employee review should happen face-to-face, if at all possible. There may be some extenuating circumstances where one can be done over the phone, but that would be the exception rather than the rule. A face-to-face review can facilitate conversation and help make receiving feedback easier as well.
How to conduct face-to-face reviews easily:
- Schedule a time well in advance to ensure no conflicts.
- Pick a location that allows privacy.
- Establish a friendly, professional relationship with the employee beforehand.
- Provide video platform options in cases where the employee works remotely.
4. Give Specific Examples
Specificity eliminates the possibility of confusion. If the employee has done something wrong, a vague description won’t help them correct the mistake. Being specific includes using real examples of times when the employee excelled or struggled. If you can point to examples, employees will generally have an easier time learning from them.
How to show specificity:
- Keep detailed notes throughout the periods between reviews.
- Ask the employee for any specific examples that they can think of as well.
- Pay close attention to the performance of your team members at all times.
- Use the examples as a teaching moment.
5. Create a Plan of Action as a Conclusion
If an employee leaves a performance review without any ideas for what they should do next, the review failed to achieve its purpose. No review is complete without an action plan in place for how to improve. Even if the employee gets exemplary marks in all areas, you should still create a plan for helping them get to the next level.
How to create an effective action plan:
- Talk about the goals they want to achieve, both short-term and long-term.
- Look at strengths and weaknesses to determine which areas need the most work.
- Set firm deadlines for major milestones.
- Detail the steps they’ll need to take to reach their goals.
What Not to Do During a Performance Review
There’s always a right way and a wrong way to do something. Unfortunately, there are many pitfalls you can fall into when navigating a performance review. Here’s a quick rundown of some of the things you want to make sure to avoid:
- Showing insincerity: People can spot phony sincerity quickly. Don’t say anything you don’t mean.
- Dropping surprises: Employees should know what to expect in a performance review. Surprising them with something out of the blue can be nerve-wracking.
- Rushing things: A review should never be rushed. You’ll need to set aside the right amount of time and even prepare to go over if necessary.
- Vague criticisms: Don’t just speak in vague terms, like “you’re unproductive.” Employees will likely become defensive when you do. Giving specific examples bolsters your point.
- Speculative thinking: A performance review is not the time to speculate or spread rumors. Keep things grounded and straightforward. You can discuss the future of the company at another time.
- Speaking negatively: If you spend the whole review beating the employee down verbally, they’ll come to loathe performance reviews. This should be a time to encourage and inspire, not hit them with a barrage of insults.
- Making empty promises: Fulfilling promises is an important part of building trust among team members. If you’re making promises you don’t intend to keep, that will only damage trust.
Dealing With Tough Questions
Can I get a raise?
During a performance review, employees may ask you some tough questions. Those questions may include asking about getting a raise if they’re performing well. Chances are, that decision ultimately isn’t one you can make on your own, but that’s not an encouraging answer. Dick Grote, the author of How to Be Good at Performance Appraisals, says giving a quick answer is unhelpful to all involved. “There’s nothing to gain from saying no right away,” Grote says, “and you can’t say yes without checking with your boss or HR first.”
In this situation, Grote suggests asking for more information from the employee as to why they think they deserve a raise. Take notes and show that you genuinely want to learn why they think a pay raise is in order. Grote also says you should acknowledge that simply asking the question takes courage. The employee has left themselves vulnerable, and that shouldn’t be ignored. Ultimately, you need to be honest with them. If you intend to follow up with others to see if a raise is possible, say so. If the opportunity isn’t there, tell them that. Don’t say anything you don’t mean, and, as noted above, avoid making empty promises.
Am I going to be fired?
When a performance review doesn’t go well for an employee, they may ask if they’re going to be fired. As always, you need to be honest. Explain that the purpose of the review is to avoid that unpleasant scenario. As long as the employee improves on what you talked about and shows commitment to doing better, termination isn’t likely. However, if things don’t improve, tell them that you’ll have no choice but to consider it. Don’t shy away from the fact that part of your job is to help them succeed. It’s up to them to respond.
Resources for Giving Effective Reviews
You don’t have to go into a performance review blind. Preparation is key, and there are many resources out there that you can use so you’re prepared for every review you conduct. Here are some helpful resources that can make the next performance review the most effective it can be.
- Sample Template: This sample template from Forbes Advisor can give you a good start in organizing your reviews.
- “A First-Time Manager’s Guide to Performance Reviews“: This article provides a useful example of a yearly schedule you can follow when preparing for and conducting performance reviews.
- How to Be Good at Performance Appraisals: Simple, Effective, Done Right: This book by Dick Grote provides helpful insights and practical examples that will help you make the most of your reviews.
If you need further help with providing constructive criticism, check out the following article: “How to Deliver Constructive Criticism the Right Way.”
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- Adams, A. (2020). A First-Time Manager’s Guide to Performance Reviews. The Muse. https://www.themuse.com/advice/a-firsttime-managers-guide-to-performance-reviews
- Dierdorff, E. C. (2023, April 5). Time Management Is About More Than Life Hacks. Harvard Business Review. https://hbr.org/2020/01/time-management-is-about-more-than-life-hacks
- Gallup, Inc. (2023). Re-Engineering Performance Management. In Gallup.com. https://www.gallup.com/workplace/238064/re-engineering-performance-management.aspx
- Hoory, L. (2023, March 8). The State Of Workplace Communication In 2023. Forbes Advisor. https://www.forbes.com/advisor/business/digital-communication-workplace/
- Kleban, R. (2022, January 21). Back to Basics: Performance Reviews with Clarity and Purpose. TroopHR. https://www.troophr.com/blog/back-to-basics-performance-reviews-with-clarity-and-purpose
- Lucas, S. (2021, January 5). 18 True Tales of Ridiculous Performance Appraisals. Inc.com. https://www.inc.com/suzanne-lucas/18-true-tales-of-ridiculous-performance-appraisals.html
- Queens University of Charlotte Online. (2022). Communicating in the Modern Workplace. Qnstux. https://online.queens.edu/resources/infographic/communicating-in-the-workplace/
- Slack. (n.d.). Inbox zero and other productivity myths. Slack. https://slack.com/blog/productivity/inbox-zero-and-other-productivity-myths