How to Run a Great Annual Performance Review in Six Proven Steps
For many employees, the annual performance review is the most stressful work conversation they will have all year. For managers, this meeting is just as tense. How should you, as a manager, go about conducting an effective annual performance review?
Employees all over the world dread the annual performance review. They often look to this yearly evaluation with anxiety, annoyance and anger as it’s a measure of their whole year of work bottled into a short meeting that will determine their chances at getting a promotion, a raise or a bonus.
Leaders don’t like the review much, either. Organisations have a lot of expectations for managers from this process, which usually takes them at least five times longer than it takes their employees.
Yet, despite the natural aversion from both sides of the table, the annual performance review is an inevitable (and important) part of the job, and very vital to your team’s growth. So, if you are aiming to be a superstar manager, it’s time to learn how to conduct a great annual performance review.
Plan, plan, plan
You might be tempted to throw together off-the-head feedback for your employees but you probably already know you shouldn’t. You should treat the annual performance review process as a year-long activity and put thought into it well ahead of time such that by the time it comes around, you are ready.
Planning will help you deliver more thorough and personalised feedback and, when review season rolls around, there will be no surprises for you or your employees – and that’s exactly what you should be striving for.
Nothing about a review – from the content to the timing – should ever come as a surprise.
Set goals and expectations
At the beginning of the year, have a meeting with your employees to share your annual goals and expectations for the team. Then, meet with them individually to set their own performance goals. This not only ensures that everyone is clear on their expectations for the year, it also gives you both a clear outline to follow each time you sit down to discuss performance over the coming months.
Improve your employee engagement in less than two minutes
Remember that while goals should be specific to each person’s role, they should also be clearly aligned with the organisational goals so that employees can see and understand how their performance affects the performance of their team, and the organisation as a whole.
Hold touch-base meetings
You should be tracking your employees’ goals and giving them feedback all throughout the year. Whether you choose to have monthly or quarterly check-ins, pre-schedule these meetings at the beginning of the year so that they always enjoy top priority status in your calendar.
Before each meeting, prepare a brief agenda. You should review the employee’s annual goals, discuss the expectations you have outlined, review project updates and address any questions or additional assignments you have.
You should also make it a point to give each person informal feedback on their performance, including offering praise where it is due and addressing any ongoing or potential issues.
Addressing issues with employees is sometimes tough for managers but one helpful tip is to frame comments in terms of behaviours someone should start, stop, or continue: Perhaps you’d like an employee to start cc’ing you on emails to other managers, stop taking long lunch breaks, or continue to turn in projects ahead of the deadline.
Also remember to make time to listen and make this a conversation not a lecture, ask each employee to share their own thoughts and questions on the issue.
After each of these meetings, make sure to take notes for yourself about what you discussed. It is these notes that will help you to knowledgeably summarise the year and remember what you discussed with each one of your employees earlier in the year when the end of the year rolls around.
Ask your employees to prepare too
A couple of weeks before the actual annual performance review, ask your employees to start pulling together a compilation of their annual results. Ask each employee to craft a summary of their key job responsibilities, current project work, and a recap of goals and achievements.
It can also be helpful to have each employee complete a written self-evaluation. This not only helps employees feel like they have a say in the process, but it challenges them to take an honest look at their own work behaviour, which is helpful when talking about their performance.
The best self-evaluations are usually 5 – 10 open-ended questions, such as:
What accomplishments are you most proud of this year?
Where have you fallen short of the expectations and goals of the team or yourself?
What are your areas for growth and how are you addressing them?
What can your manager do to further support your progress and success?
In the meantime, you should spend the month before the annual performance review compiling your own notes and results for each employee.
Begin to gather both quantitative measures of employee performance, like sales reports, call records, and deadline reports, as well as qualitative measures, which could include feedback from clients and customers or your personal observation. Pull out those notes you took during the year in your touch-base meetings, too.
One common tool is the 360-degree review, which is based on an employee self-assessment and peer reviews, as well as superior and subordinate feedback.
As you review the results, ask yourself the following: Is this person meeting their goals, your expectations, and the company’s success indicators? If not, why – and can you change this? If yes – are there rewards, acknowledgements, or larger projects that you can assign to reinforce your star performers? This is where promotions and bonuses come in.
Get specific goals out of the review
Make sure the meeting produces tangible results. You and the employee should agree upon specific actions to be taken by each of you after the annual performance review.
Both the manager and the employee should leave the meeting with items on their to-do list. The lists do not have to be long and they do not have to contain an equal number of items. The goal is to have a written action plan that is achievable and valuable to both parties – including deadlines.
The annual performance review, when done well, can help align leader and employee, connect your team and organisational goals and be a catalyst for employee growth.
A well-planned annual performance review gives both the employee and the manager feedback to be successful.