Guide: Effective Employee Performance Reviews for Managers

Conducting an employee performance review can be difficult, but it’s important for the overall success of the team and organization. This article will provide you with the necessary skills to make the process easier, from evaluating an employee’s performance and documenting it to having the conversation, recording it and following up. We also go into details of an effective online employee review. You’ll also learn techniques to make giving feedback a regular part of your job, so that when review time comes, you’re not left unprepared.

The Utimate Guide of conducting employee performance reviews - Illustration with Stopwatch in Hand

What is an employee performance review?

An annual review is a formal evaluation of the quality of an employee‘s work and the discussion of that assessment. This is an important part of performance management, which also includes goal setting, giving feedback, reviewing, and employee development. It is a chance for employers to diagnose issues before they get worse and for employees to understand what is expected of them and how well they have met those expectations. It can also be used to make staffing decisions and protect the company in the event of a legal challenge. Furthermore, it is essential to have ongoing coaching and guidance, and a formal review helps to reinforce that. It gives employers the opportunity to give feedback and document it for the organization. These are part of the available management tools to influence outcome and performance.

The performance review process

If your organization has an existing system for performance reviews, be aware of the requirements and adjust your use of the process outlined in this article accordingly. If there are no existing formal procedures or documentation for performance reviews, this list offers a procedure and tools for you to use: Evaluating your employee’s performance throughout the year. This process includes:

Documenting your impressions.
Gathering necessary materials, including your employee’s self-appraisal and 360-degree feedback
Finding a suitable time and place for the meeting
Setting the right tone during the discussion
Offering feedback that the recipient can use to grow
Defining next steps, including setting goals and creating a development plan
Following up with your direct report
Assessing your effectiveness in the appraisal process

Following these steps will make the performance review process less stressful for you and more useful for your employee.

The performance review process is a two-way street: it’s a collaborative effort between you and your employee. As the manager, it’s your responsibility to lead the review meeting and provide a formal appraisal, but your employee should also be involved as well. To get the most objective and effective review, start having feedback discussions and asking for self-appraisals long before the meeting. This will foster trust, create a sense of partnership, avoid surprises, and help with constructive criticism. That way, the employee will feel like they are contributing to the appraisal, not just receiving it. Now that you know the basics of performance reviews and how the employee can be involved, it’s time to collect the right information for the evaluation.

Gathering information for the annual performance reviews

Evaluating an employee’s performance is an ongoing process that should be conducted on a regular basis throughout the year. To get a comprehensive understanding of their work, it is important to collect data from multiple sources. Prior to the review discussion, take time to review the information and assess the employee’s performance.

Actively observing your employee’s performance is critical for monitoring progress and identifying opportunities for improvement. This approach can help you recognize their strengths, understand their weaknesses, and pinpoint any areas of concern before they become larger issues. In a fast-paced work environment, it is especially important to stay alert to potential signs of difficulty – if a worker is off-track, you need to know right away so you can take action and get them back on the right path. Document your observations as they happen so you have a reference at review time; it is hard to remember everything that happened throughout the year, so having written records will help you stay impartial.

Consider these two approaches for tracking employee performance:

Keep a notebook, file, or folder on each of your direct reports, and up-date it regularly with notes on their performance. Set a reminder in your calendar to periodically add entries.
Request short, informal monthly progress reports from each of your employees, or do monthly 1-on-1 Sessions. You might specify a few topics to cover, such as key accomplishments, problems, or concerns, and what the individual plans to accomplish in the next month. The quality, completeness, and timeliness of these reports will also give you a sense of the individual’s performance.

Gathering the necessary data beforehand can make your annual evaluation process smoother, while simultaneously highlighting any potential problems, as well as providing you with the opportunity to offer continuous guidance and instruction. Although a performance review typically only takes place annually, the more prepared you are, the less rushed you will be when the date arrives.

If you don’t have any records to refer to for an upcoming performance review meeting, use the information you have to recollect your employee’s achievements throughout the year. Take a look at your calendar and emails to remember moments like when Employee X filled in for her colleagues when they were out ill, or when he/she made a mistake during a quarterly meeting. Going through this kind of documentation can help you remember details that may have been forgotten.

Employee self-assessment feedback

As the deadline for the performance review draws near, it is beneficial to request feedback from the employee. Ask the employee to submit a self-assessment prior to your review meeting, letting them know that their perspective will be taken into account during your assessment.

If your organization does not have a self-assessment form for employees to fill out, you can create one. This could be anything from a formal written report to a list of notes. We’ve created some cards to get you started with the most typical questions a self-assessment should cover.

Employee Self-Assesment Cards

The 360-degree feedback

In addition to having an assessment between you and your direct report, you may find it beneficial to obtain 360-degree feedback in order to gain a better understanding of the employee’s performance.

360-degree feedback is a process where feedback is collected from a variety of sources within an organization. It is a process that allows employees to receive feedback from co-workers, supervisors, and even customers. This feedback is used to identify strengths, weaknesses, and areas of improvement. This type of feedback can be used to create action plans for professional development, create career paths, and assess performance.

Though it may be time-consuming and uncomfortable for people to provide a critical report on their colleagues, when done properly in a trusting environment, it can offer a much more comprehensive view of the employee’s work than a single person can. However, if the employee’s job does not involve interaction with a wide variety of people, a 360-degree approach may not be necessary. For optimal results when collecting 360-degree feedback, make sure to create an atmosphere of trust and honesty.

Video: What is 360 feedback and how can it benefit your organization?

How to do 360-degree feedback

Clarify your purpose: Let survey respondents and feedback recipients know that the purpose of the 360 is to provide constructive feedback to identify achievements and areas for improvement. Stress that it is not intended to be a negative experience, but rather an opportunity to learn and grow. Moreover, if they have any ongoing issues with the employee, encourage them to address those with the individual directly.
Make your criteria clear: Rather than assigning a numerical rating to difficult-to-quantify qualities such as “communication skills” or “integrity,” request from your respondents tangible examples to gain insight into how they interpret these attributes. For example, “Maria explains project instructions clearly every time. When I have a question, she is happy to sit down with me to make sure we’re on the same page for a given assignment” is more informative than simply stating that Maria has been rated 5 out of 5 for communication.
Diversify your pool of respondents: Rather than asking a few people from one category or one person from each category, it is beneficial to seek input from a variety of peers, direct reports, and internal and external customers. This ensures that a more comprehensive picture is obtained and allows respondents to feel more comfortable sharing their opinions. Furthermore, it demonstrates to the employee being evaluated that their input matters, and you have taken the time to seek out a well-rounded set of data.

Performance rating resources about your employee

Gather any remaining documents that could be beneficial in assessing an employee’s progress over the course of the past year after you have collected data from both your direct report and other people in the organization. Examples of these resources may include:

Look at the most recent job description for the position, and use this as a reference for what the employee should be doing.

The employee’s goals and development plan, previously established at a review session or earlier in the year, will be key in evaluating her performance, as they provide clear markers of success.

The individual’s employment history, which includes previous training courses, annual performance appraisals and reviews, and any other related documents.

Once you have collected all the data, you will need to assess it and record your assessment of the employee. We will discuss both of these topics in the following paragraphs.

Evaluating employee performance

Formulate an opinion of your employee’s performance during the year by reviewing all the information and data you have collected. Consider both positive achievements and any shortcomings, and look for patterns. Note down your impressions to share with your employee and keep for future reference.

Evaluating an employee’s work can be tricky, especially for positions that don’t have easily quantifiable results. To make an objective assessment, focus on the behaviors that are most critical for successful performance. Look to the job description for guidance and consider the qualities your organization values to track the relevant skills. Examples can be used to support your assessment and ensure the employee is meeting the goals set at the last review. For someone in Sales for example, communication skills are critical, while for a software developer, coding skills are more important. Beyond the company and job specific questions there are some general attributes:

Initiative: Does the employee demonstrate ambition or take initiative to im- prove processes and products?
Ability to ask questions: Does the employee know when to ask questions rather than make assumptions?
Cooperation and teamwork: Is the employee flexible when asked to perform a task outside his regular duties or to work extra hours? Does he volunteer to pitch in when the team is short-handed?
Communication skills: Does the employee communicate adequately with man- agers, peers, and customers? Have any problems been created or solved be- cause of the employee’s communication skills?
Focus: Does the employee maintain focus and prioritize job duties effectively?
Productivity: Does the employee work effectively and meet deadlines?
Knowledge: Does the employee demonstrate an acceptable level of knowledge to perform his job?

When evaluating the employee, look through the relevant materials, make notes of any relevant examples, and consider what may have caused any achievements or performance issues. Prior to the meeting with the employee, assess if any of the factors were caused by yourself.

Consider your role in the employee’s performance

Recognize that some poor performance may be due to inadequate supervision on your part. Consider how your actions and behavior could have contributed to the successes or failures of your staff, and be willing to be honest with yourself in order to assess the situation more accurately and fairly.

In some cases, its the manager who have caused or aggravated the employee’s challenge with the “set-up-to-fail syndrome”? This phenomenon can occur when a manager unintentionally creates a pattern of negative feedback, which leads to a decline in motivation and performance. To avoid this, ensure that you are providing sufficient praise for good performance and constructive criticism for areas that can be improved. We also have a list of nine warning signs of bad leadership.

Quick Test: Have you influenced your employees performance?

Looking back, you may realize that you hindered your employee’s progress by micromanaging them, or that more frequent guidance would have enabled them to move faster. Taking into account your own influence on their performance will help you evaluate it accurately and fairly, so you don’t unfairly blame them and can put the necessary changes in place going forward.

Document your impressions

You should follow the instructions given to you by your organization when rating the employee’s performance, but don’t be limited to just the format of the form. Feel free to modify or extend it to better communicate the whole story. Numeric ratings alone won’t provide sufficient information, so be sure to add comments, observations, and examples to give your employee more meaningful feedback. You may also wish to include attachments such as comments that are too long to fit on the form or the employee’s development plan from the previous year that could contribute to the evaluation.

Document your observations on the employee’s job performance in an impartial and evidence-based manner. Connect successes and failures to their respective set goals, such as “Lisa increased social media reach by 15%, which surpassed her goal of 10%,” and “Michael has an above average deal closing rate of 30% compared to the average of 25%”. Provide specific examples to illustrate your point and to allow the employee to understand the criteria of your assessment and to recognize the fairness of the evaluation. Use the most relevant examples to make your point in the written evaluation, and keep the other examples on hand for the review session, in case you need to back up your judgement in the conversation. Examples to include:

Details about what you observed
Supporting data, such as reports or 360-degree feedback
The impact on your team and organization

When providing negative feedback, it is important to avoid making judgements and focus on providing facts. Instead of saying, “Martin doesn’t seem to care about sales figures” or “Martin doesn’t know how to talk to difficult customers” provide a neutral statement such as “Martin has received five complaints from extremely unsatisfied customers”. This will be more helpful in identifying specific areas for improvement.

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Details about what you observed
Supporting data, such as reports or 360-degree feedback
The impact on your team and organization

Best-practice of an effective performance review

It’s now time to hold the meeting to evaluate the written work. Although this conversation may feel uncomfortable, with the right attitude, you and the employee can end the meeting feeling ready and confident to move forward. This chapter will provide guidance on preparing for the meeting, setting the correct atmosphere, and addressing the employee’s performance.

Prepare for the Employee Performance Review Meeting

In order to ensure that the review process is effective, it is important to take care of the necessary logistics prior to the meeting. This will help to put your employee at ease and make the review process easier.

Schedule it well in advance.
At least one week prior your meeting.

Choose a convenient time.
When suggesting a conversation, don’t plan it during a lunch break. Allow 45-60 minutes for the discussion, and make sure that neither person has an immediate commitment after the conversation has ended. This will give your direct report time to process any emotions that might be brought on by a difficult conversation.

Select a neutral location.
Locate a secure, secluded area away from any kind of disturbance. To make both parties feel secure and comfortable, it is best to meet in a business-like setting, such as an office, an empty office, or a conference room, instead of in a public place, like a canteen or café. When meeting in an office, sit beside the employee to create an atmosphere of cooperation and open dialogue. Sitting at the desk may make one feel superior and distant. When meeting online make sure this is a private call, it is also important that you sit in a private area without anyone in the same room. Here the same rules apply as an in-person meeting – make it private.

Agree on content.
Prior to the meeting with the employee, clearly explain its purpose. Include relevant topics you intend to cover, such as their self-assessment, a review of your assessment, a review of their strengths, and a conversation about areas where they can improve.

Prepare for your conversation.
Before your conversation with your direct report, make sure you have all of the materials that you have consulted during the evaluation. Give the direct report a copy of your assessment ahead of time so that they have time to process it in private and come to the meeting with any questions or reactions they may have. This way, they will be better prepared and more composed for a productive discussion.

Setting the right tone for the employee review

Most people, even those with impressive accomplishments, feel a degree of apprehension ahead of performance review meetings. It can be nerve-wracking to expect criticism from one’s manager, regardless of how constructive the feedback may be. For managers, it can be uncomfortable to have to provide feedback, worrying that the employee may become defensive or emotional in response.

Create an atmosphere of collaboration from the beginning. Make your employee feel comfortable by being welcoming. Refrain from any potential interruptions by silencing your cell phone and turning off any audible notifications that your computer might make.

Inform your direct report that the goal of the review is to identify how she can best reach her objectives and to help you comprehend what she needs to be successful in her role. Make it clear that her input is both needed and appreciated, and that you anticipate the conversation to be an open exchange, so you can work together to address any situations that may arise. Additionally, let your employee know that you plan to take notes so that you both can recall the discussion.

Taking notes during the review talks

It is important to record the main points and results of your conversation. This is beneficial for both of you, as it can be used to refer back to in case there is a disagreement or if an unusual legal dispute arises.

These are the things you need to write done:

The date of the meeting
Names of attendees
Key points and phrases used during the meeting
Any points of disagreement
If you discuss any plans or objectives moving forward
Performance goals for the coming year
An overview of any development plans you and your direct report discuss
A summary of agreed-upon next steps

Even though you’re a highly experienced computer user, use a pen and paper to take notes during meetings; using a computer screen can create a sense of disconnect between you and the person you’re meeting with. As soon as the meeting is over, immediately type up your notes while the details are still fresh in your mind.

You may be required to provide a copy of the record to the employee, HR for the employee’s file, and to keep a copy for yourself. In some cases, both the manager and employee must sign it, and the employee may include their own comments.

This is the perfect start of your annual review

At the beginning of the meeting, explain the purpose and goals and then ask the employee to share her self-evaluation. Doing this will give you insight into her opinion of her performance and prevent you from dominating the discussion too soon. If she is reluctant to give her opinion, ask her questions to encourage her to open up, such as “How do you think you are doing in your job? What have been your successes, and what issues have you faced?” Now is the time to focus on her perspective, not to comment on her answers.

While speaking to your employee, demonstrate active listening. Avoid interrupting them, and prove that you are paying close attention by occasionally summarizing what you heard after they have finished talking. For example, you could say, “So, you think you have achieved all the objectives related to the weekly sales reports, but it is difficult for you to get in touch with all the necessary customers. Is that accurate?” This gives them the opportunity to clarify any misinterpretations.

Discuss employee performance

During your performance review session, it can be daunting to give your employees constructive feedback. However, it is essential to get the most out of this review as it can be an opportunity for problem-solving and career-building. Frame your feedback as a way to reach a goal-related outcome, such as increasing sales or customer service. Make sure that the focus of the conversation is on the employee’s performance and not on the employee themselves. Avoid making any negative statements about the person’s character, values, or intentions, and use objective and neutral language. Avoid expressing any anger, judgement, or contempt, even if the employee’s performance needs significant improvement.

Don’t let your written assessment be the only focus of your meeting. Instead, use it to help remind you of the points you want to make during the conversation. Focus on how previously agreed upon performance goals relate to the business’s overall outcomes. Discuss areas where the employee can improve and be selective about what you bring up; no need to bring up every single issue.

Recognizing strong performance

Focus on the strengths of employees who have met or exceeded expectations by recognizing and praising their achievements. Make sure they know you value their work, as this will prevent them from feeling defensive during the performance review. Give them specific examples of their successes and strengths, such as increased sales or excellent organization of meetings. By highlighting their most important contributions and achievements and emphasizing the behaviors that made them successful, you can motivate and inspire them.

For these star performers, identify areas for growth in line with their strengths and accomplishments. Your diligent employee may acknowledge any goals not achieved and may start a conversation about potential areas of improvement. Doing so may make them more engaged in the conversation and more motivated to progress.

If your direct report has not suggested any areas for improvement, encourage him/her to do so. Ask open-ended questions such as: How do you view the current situation? What do you think went well and what could have gone better? How do you think you could do things differently in the future? Asking questions in this way will create a positive environment without undercutting their successes. By responding, the employee is able to bring up the issues and consider different solutions, giving them more control of the conversation and a sense of responsibility for the suggested improvements.

Addressing performance gaps

For direct reports who require constructive feedback, it’s important to specify where their performance has fallen short. First, recognize any areas in which they achieved or surpassed their goals. This will create a sense of trust and fairness, making them more receptive to your advice on how to improve. However, don’t minimize any negative feedback by placing it between positive points; this could make your message confusing.

After spotlighting the successes of your subordinate, illustrate the discrepancy between the target and the real outcome: “We had hoped to acquire ten new customers this quarter, but only seven were closed.” Refrain from apportioning responsibility; collaborate with your worker to discover the source of the issue. Request their input: “What do you think may have led to the gap between your goal and the actual results?” Put your subordinate at the forefront of determining the source, and listen attentively.

The causes of inadequate achievement may not be straightforward and could have nothing to do with abilities or enthusiasm. It could be due to faulty work systems, personal difficulties, disputes with colleagues, or even fatigue or burnout. Through discussion to identify the source of performance discrepancies, you and your direct report can typically create a neutral setting in which both of you can make positive contributions.

If your employee hasn’t pinpointed the issues stopping him/her from reaching goals, ask questions to help you find a solution. Inquire if he/she requires additional product knowledge or training, if there are too many distractions in the workplace, if all the necessary resources are available, and if the scope of her job is understood. This way, you will be seen as attempting to find a solution rather than to criticize, and your employee will be more likely to respond positively. It is possible that the discrepancy between expected and actual performance is the result of unrealistic deadlines or ambiguously communicated expectations.

At the end of your review session, summarize what you and your employee have discussed and propose a meeting to develop an action plan.

Establish next steps with a performance improvement plan

At the conclusion of the appraisal cycle, you should hold a performance review discussion with your direct report. Afterward, schedule a performance-planning session to discuss goals and create a plan for the upcoming year. To ensure that your employee has time to comprehend your feedback and prepare for the planning session, it is best to wait at least a week before meeting again, though a few days can still be beneficial.

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A performance improvement plan (PIP) is an action plan designed to help an employee improve their performance in the workplace. It usually involves setting goals, tracking progress, and providing feedback and guidance. The goals outlined in the plan are typically specific and measurable, and designed to help the employee improve their performance in specific areas. The plan may also include steps to be taken when the employee is not meeting the goals, such as additional training, coaching, or disciplinary action.

Set goals together

Establishing meaningful goals is essential to providing employees with motivation and direction. These objectives help them understand how to invest their time, energy, and resources to achieve the desired results. Goals can come from various sources, such as performance gaps and comments noted in the previous review period, career ambitions and job descriptions, as well as departmental or organizational plans and strategies. If there is rapid change in the organization or field, or an individual is on a fast track to success and mastery, goals may need to be adjusted frequently. Moreover, it is important to focus on job assignments that have the biggest impact on departmental or organizational success.

Allow your direct report to have a say in creating their own goals. Involving them in this process will help them feel a sense of ownership and they will be more motivated to work towards them. Demonstrate how their objectives align with the wider goals of the organization and how they contribute to the overall strategy.

Employee career development

If your employees lack opportunities to develop and grow, they may become bored and unmotivated, increasing the likelihood of them seeking out other, more stimulating jobs. By creating a plan that enables employees to improve their skills and advance their careers, you can give them a sense of purpose and satisfaction in their work. As a manager, it is your responsibility to help them identify ways to keep growing.

Take the time to talk to your employees—especially your top performers—about their career goals for the coming year. Ask questions to learn more about their current skills, motivation, and values, as well as what they’d like to be known for and what matters most to them in their work. This will help you to understand their ideal career trajectory and how it can be integrated into the organization’s objectives.

Do not let talented and motivated individuals remain stagnant in their careers. Identify any deficiencies in their current skill set and experience that need to be addressed in order to qualify them for a higher-level role in the future.

Define goals with your direct reports

Make their goals challenging.Goals should strike a balance between being achievable and ambitious, as overly difficult targets can demotivate employees while easy ones can lead to lackluster performance. To create a sense of accomplishment and encourage effort, it may be beneficial to set challenging objectives as a range rather than a specific benchmark. Make sure you explain to employees how meeting the goal can benefit them, such as through recognition, financial bonuses, career development or greater visibility in the organization.
Make their goals measurable. To gauge if a target has been met, quantitative goals can be monitored by viewing data such as sales revenue, number of errors, or time to market. Qualitative goals, such as those related to professional development or customer satisfaction, are more difficult to measure. To overcome this, analyze the employee’s behaviors or set goals to measure tangible facets of a qualitative skill. For example, to assess progress with customer relations, you may consider the average time needed to resolve a customer’s problem or the number of customer complaints handled satisfactorily per quarter. It is important to decide in advance how you will measure progress towards each goal.
Don’t set too many goals. If you set too many objectives for your employee, the significance of each one can be minimized, thereby decreasing the progress on each one. It is advised that you should limit the goals for your employee to three or four so that each one is more meaningful.

Remember that the objectives you set are only one component of an employee’s role; they are not the entirety of the job. There are many important performance elements, such as assisting a co-worker during an urgent situation or mentoring a new team member, that are not suitable for setting goals.

Create a development plan

How can your direct report address the performance issues you’ve discussed and still achieve the objectives you’ve agreed upon? Start by giving him the chance to come up with a plan. This can help him take ownership of the solution and make him more likely to follow through. Offer suggestions to improve the plan, and question any assumptions that are uncertain. Establish milestones and decide on a timeline to ensure the plan is put into practice successfully.

If your employee is having difficulty devising an effective plan, it is important to present them with various solutions. Showing that there are various routes to a solution demonstrates that the issue can be resolved. You can recommend methods such as training, hands-on practice, or working with an experienced coworker. Once a decision is made, make sure to write down the chosen plan.

Start by listing all the goals that you and your direct report have agreed upon, including any details of how they should be measured and what outcomes you expect. After that, for each goal, outline the necessary actions that your employee will need to take in order to achieve it.

Break down each goal into isolated tasks, with interim objectives and clear outcomes.
Plan the execution of those tasks and assign start and end dates.
Establish clear checkpoints for progress; set milestones, perhaps monthly or quarterly, along the way to monitor progress toward the goal.
Determine the resources needed to fulfill each task, such as time, equipment, training or coaching, or assistance from support staff. Make sure sufficient re- sources are allotted to fulfill each task.
Discuss any contingency plans. What will happen if something goes wrong while the employee is working toward the goal? What are possible risks, and how could he manage them?

Make sure you and your direct report both have a copy of the development plan. Keeping the targets and expectations documented will help everyone stay on track. This plan serves as a useful tool for gauging progress, preparing for future reviews, and assessing performance throughout the year.

Monitor progress and follow up

Despite your task being complete, your job as a manager is not finished. It is important to continue monitoring development, offering feedback, and assessing if further training, mentoring, or help is needed. Regular feedback and communication will help your direct report remain on target and reach their goals.

Hold regular meetings with your employee at least every two weeks to evaluate their progress. Refer to the timeline in their development plan and use these check-ins to track their progress and provide feedback. If your employee is not meeting the goals, use these sessions to intervene and work on solutions. Additionally, use these meetings to recognize their successes and celebrate their accomplishments.

If someone is not used to receiving feedback regularly, they may be taken aback at first. However, with consistent check-ins and conversations, they will eventually become accustomed to the process. Providing feedback on a regular basis helps to foster a collaborative relationship between the employee and employer, and encourages the employee to reach their goals. Ask your employee what is going well, what needs improvement, and what could be done to aid in their success. Make sure to emphasize that you are dedicated to helping them reach their goals.

No one can reach every goal without facing some kind of difficulty along the way. If your employee is having a successful experience, be sure to recognize it. However, if the plan you both agreed upon is not working, ask for suggestions for another solution. If that does not work, provide guidance and coaching to help the employee. It is possible that their goals and plans will have to be adjusted if they keep struggling. Nevertheless, by taking an active role in helping your employee reach their goals, they will feel supported and comprehended.

Pay close attention to an employee who is having difficulty meeting performance standards; regularly meet with him to assess his progress. If there is no improvement or meaningful contributions, the employee may be in danger of losing their job. It is important to provide feedback to all employees, regardless of their performance level, as it is necessary to keep track of the status of everyone.

Evaluate your approach

Take the time to reflect on your own performance while monitoring your employee’s progress. Request feedback from your employee regarding the goal-setting meeting and the overall review process. Ask them what was useful, what wasn’t, and what could be improved in the future. Show that you take their feedback seriously by making changes if necessary. Additionally, think about how you prepared for the conversation, and how you created an open climate for communication. Ask yourself if your feedback was clear and specific, and if you listened carefully to what your employee said. By taking the time to reflect and make changes, you will become better at conducting performance reviews.

Handling tough topics

No matter how well you have planned for your performance review, you may find yourself facing some challenging topics, like raises, potential promotions, and underperformance. This chapter will discuss strategies for handling these issues.

Responding to raise a request

During a performance review, it is best to avoid discussing a potential raise. Instead, thank the employee for bringing up the request and promise to get back to them by a specific date. If a decision has not yet been made, explain that salary is determined by both the value of the job to the organization and the individual’s performance. Rejecting the request will only reflect the value of the job and not the employee’s worth.

Discuss with the employee the ways in which she can make her job more valuable to the organization and how her performance can be improved. Consider what extra duties and responsibilities she can take on. Discuss these options during the performance review and then follow the company’s guidelines to determine if a raise is feasible.

Discussing a promotion

During a review session, an employee may request a promotion—an increase in their title and salary. As a manager, it is important to take the time to consider the request before responding. Evaluate the employee’s behavior and if it reflects the values of the organization, then the individual may be suitable for a promotion. However, it is essential to remember that a traditional career path may not be the best option for everyone. Consider if the position is compatible with their interests and skills, and if the employee will be interested in the new responsibilities. If not, look for an alternative role that meets the organization’s requirements and the employee’s ambitions.

Before making the decision to promote an individual, make sure they are capable of handling the job they are applying for. Having recently evaluated their performance should make it easier to determine if they are a suitable candidate. Additionally, it may be beneficial to get the input of other people, such as through 360-degree feedback, to gain further insight. Examining the current job duties of the potential promotion may also provide evidence that they can handle the role, as it shows they are already successfully taking on the responsibilities that come with it.

If your direct report’s past performance may not be indicative of how she would do in the new role, you might need more information to make a decision on transferring her to a permanent position. To evaluate her potential success, create a task similar to what she would do in the new role and give her a (short) deadline. Make sure she understands that it is only a temporary assignment and not a permanent responsibility, as she may become disgruntled if her role changes without any change in title or salary.

If you have determined that an individual is not ready for a promotion, it is important to communicate your concerns to them and explain why their request is being denied. You should then discuss what tasks and projects they can do to better equip themselves for advancement. Additionally, create an action plan that will give them the opportunity to gain the necessary skills and experiences to progress. You may even wish to document this plan in their development plan.

Addressing unacceptable performance

Teams are generally composed of individuals who excel, meet expectations, and may require additional improvement in certain areas. However, in some cases, there may be an individual whose performance is below par and in need of direct, critical feedback in their performance review. For this individual to remain employed, they must demonstrate immediate improvement.

If an employee’s work results, behaviors, or a combination of both are subpar, the primary goal of the review session should be to initiate an immediate improvement. The preparation for this meeting should be distinct from what is done for employees who are performing satisfactorily. Refrain from giving the underperforming employee a copy of the assessment before the session and, if feasible, skip the step of having them fill out a self-evaluation. This can lead them to believe that everything is alright, which is not true.

For this meeting, it is appropriate for you to be in a position of authority, sitting behind your desk with the employee in front of you. Scheduling the meeting towards the end of the day would be beneficial, as the individual may have a strong reaction and it would be easier for them to leave the office after. Start the conversation by reminding them of the purpose of the review and that they may feel awkward. Explain that you need to inform them that their performance is not acceptable, and then talk about the problems and hear their ideas on how to correct the situation.

Explain what problems you perceive—and make it clear that these problems must be solved. The following steps can be useful:

State your concern precisely
Follow with examples
Close by requesting the employee’s reaction to your perception, and make a specific mandate for change

It is likely that the employee may be taken aback when directly confronted on her inadequate performance, as she is probably accustomed to being praised in reviews. Nevertheless, it is necessary to make it clear to her that her performance this year has not met expectations and that she must take action to remedy the situation if she wishes to remain employed. Acknowledge that her past reviews may not have accurately reflected her work and reiterate the unacceptable nature of her performance.

As a manager, it may be difficult to be direct with criticism. However, excessive politeness and avoiding offense can obscure the message and make feedback less effective. Do not be afraid to give honest evaluations of employees’ work, as they cannot improve without clear direction. If an employee has a wrong perception of their performance, discuss the specifics of what you have seen in your assessment and give them the opportunity to improve. With guidance, support and regular feedback, their performance could improve significantly.

If the coaching, training, and feedback efforts you put forth to help an employee improve their performance are not successful, a performance review may prove that the employee is not a good fit for the organization. If that is the case, you should consult the HR department and follow protocol for terminating the employee. In order to be successful in managing employee performance, you should take the initiative to track observations, provide feedback, and administer appraisals throughout the year. Through this continual process, you can create a productive and successful team dynamic in your organization.

Video: Ted Talk – Don’t bury the Annual Performance Review

Economist, financier and teacher Andris Strazds is one of the independent economists, whose opinion is important for the specialists in many industries. Andris is known for his ability to justify the opinions, even if they oppose the views prevalent in the society. With his TED Talk he explains why companies should continue doing highly criticized performance reviews.

Performance Reviews FAQ

What is performance reviews

Performance reviews are an evaluation of an employee‘s job performance over a certain period of time. These reviews typically involve a manager or supervisor providing feedback on an employee‘s job performance and offering suggestions for improvement. Performance reviews can also include a discussion of an employee‘s strengths and weaknesses, an assessment of their goals and objectives, and an assessment of their potential for growth and development.

Are performance reviews effective

Performance reviews can be effective when done properly. They give employees an opportunity to reflect on their performance, set goals and discuss how they can improve. When done correctly, they can help foster a sense of trust and understanding between managers and employees by providing an opportunity for open communication. However, if done poorly, performance reviews can lead to feelings of frustration and distrust.

Why performance reviews are important?

Performance reviews are important because they provide an opportunity to assess an employee‘s performance and identify areas of improvement. They also provide an opportunity to recognize and reward good performance, foster open communication between the employee and their manager, and help ensure that employees understand their job responsibilities and expectations. Performance reviews also serve as a tool to help set goals and objectives, evaluate career progress, and plan for professional development.

What is a PIP?

In the context of employment, a pip is a performance improvement plan which outlines specific objectives that an employee needs to achieve in order to improve their performance. It typically consists of measurable goals, actionable steps and a timeline for completion.