Employee performance reviews are prone to criticism and ineffective at motivating performance. Learn our 13 tips for effective employee performance reviews to create a bigger performance conversation strategy and drive success.
The employee performance review has received a lot of criticism in recent years. Traditional employee appraisal processes have been causing headaches for both managers and employees. And most employees believe performance reviews are not effective at driving performance.
There’s still a place for the annual performance review. But success-driven organizations know it must be part of a bigger performance conversation strategy.
Regardless of whether you’re conducting an annual review, a quarterly review, or a monthly performance check-in, performance conversations can be difficult. Managers should try to create positive experiences that motivate employees and drive high performance.
But creating that kind of experience is easier said than done.
Before we dive into the tactical side of performance reviews, it’s important to understand what a performance review is and why it is important. This will give you the foundation you need to start using performance reviews more effectively in your organization.
What is a Performance Review?A performance review is a two-way, individualized conversation between a manager and an employee about performance impact, development, and growth. It is a critical component of an organization’s overall performance management strategy.
Traditionally, performance reviews have occurred once a year and have focused on evaluating past performance. Modern performance reviews should happen quarterly or monthly and should focus on driving and improving future performance.
Performance reviews give employees and managers a chance to discuss how employees are doing and how they can do better, together.
Done right, they can engage and motivate employees to maximize and align their efforts. Done wrong, they can send employees down a disengagement spiral—and even decrease performance. How do you choose the right performance appraisal method? Below are a few important elements to consider.
If you want to cultivate employee success, you must branch beyond the traditional, annual review. So much can change in your organization or with your employees in one year. It’s important to stay aligned and to keep communication going during those changes.
We recommend quarterly or monthly performance conversations, paired with a year-end review of general themes, notes, progress, and next steps. This allows managers and employees to stay on the same page about goals, progress, and performance. It also helps:
Many organizations are turned off by a quarterly or monthly performance review cadence because it feels like a hefty time commitment. But if you’re having frequent conversations, they don’t need to be long, robust, or comprehensive to be effective.
Not only should performance conversations happen more frequently—they should also be more engaging. Managers and employees should equally contribute to the conversation, and employees should be just as invested in the preparation as managers.
While there isn’t a one-size-fits-all solution for all performance discussions, every conversation should promote trust, reduce anxiety, create clarity, and showcase alignment. And these conversations don't have to be just about performance. They can address:
Traditionally, performance reviews have centered around the past—how the year went, what went well, and what didn’t go well. Employees can’t change the past, so it’s pretty disengaging to be evaluated on situations they have no power to shape.
But employees do have the power to change what happens in the future—and this is where the bulk of your performance conversations should focus. It’s good to reflect on the past, but managers and employees should also spend time looking forward.
Performance reviews can be anxiety-inducing—and one of the best ways to reduce anxiety is to bring employees into the process early and involve them in the preparation and planning. Managers should work with each employee to create a clear, shared, and collaborative agenda with main points of discussion. Both parties should know exactly what to expect—there shouldn’t be any surprises!
Today we have access to mountains of data. There’s no excuse for subjective performance reviews anymore. Managers should come prepared with data from a variety of sources such as recent recognition, 360 degree feedback, talent review ratings, one-on-one notes, goal progress, and more.
Every statement made should be fueled by data—not by the manager’s personal opinion.
To recap, here are some key differences between traditional performance reviews and modern performance reviews.
Traditional Performance Review
Modern Performance Review
The performance review has taken a lot of flak over the past several years. Many have touted the idea that performance appraisals don't work. But the reality is, performance conversations are a crucial part of the engagement and retention of employees.
Why are performance conversations important? Because they have a big impact on the success of your employees, teams, and organization as a whole.
Discussing performance can be very stressful. It’s tough for managers to give feedback and even harder for employees to receive it. How organizations handle these conversations plays a huge role in an employee’s engagement and overall experience.
Performance conversations are perfect opportunities to make or break trust. An open, honest, and regular dialogue helps to build trust among employees, managers, and the organization at large. Employees want to know—and deserve to know—exactly where they stand in terms of performance.
Ongoing performance conversations can boost employee success by:
Performance conversations help managers evaluate team performance by giving them a clear picture of how each team member is performing. They’ll know where the team is strong, where the team needs help or development, how to adjust goals, and the team’s potential to impact larger goals.
If employees aren’t aligned and on a clear path to their own success, organizations will have difficulty achieving important goals and objectives. Performance conversations allow managers to connect employees to the bigger mission and goals of the organization.
They also give organizations the data they need to make important people decisions related to: compensation, promotions, development, role changes, exits, and more.
Managers should approach any performance conversation with thoughtful preparation and lots of data and examples. In this section, we’ll discuss how to prepare for a performance review by:
Managers and employees should have a clear understanding of what constitutes good or poor performance—and this starts with organizations clearly communicating performance criteria. Effective performance criteria should help managers and employees:
Performance criteria and ratings can be difficult to address and digest. Managers should act as interpreters of that data by adding qualitative context (such as goal progress or 360 feedback) to performance. They should approach performance reviews with a coaching mindset, highlighting and distilling information to make it easier for their employees to consume.
Managers can also provide emotional support by not letting employees dwell on the negative—and instead focusing on what employees are doing well and uncovering opportunities to course correct. Each performance conversation is an opportunity to build trust by helping employees understand where they are, allowing them to share, and providing guidance on where they need to go.
Increasing the frequency of performance conversations in your organization might take some convincing—but the more often that you meet, the more effective your conversations and performance will be.
Finding time is difficult. And getting in the right mental and emotional state can be even harder. But making performance reviews a priority means that employees will feel heard, managers will coach more effectively, and the organization will reap the results.
The environment you choose for your performance conversations has a big impact on the overall vibe of the discussion. With your workspace in mind, think about what message you will be sending based on the location, time, noise, and comfort level of your meeting space.
Here are a few elements to consider when making time and space for your performance review:
These elements are important, but ensuring managers allocate plenty of time and capacity for these conversations is another challenge.
Take a page out of Fossil Group’s book, and see how they found the time and space to impact performance at every level of the organization.
With so many shifting priorities and ambitious strategic objectives, Fossil Group knew they needed to do something special to make performance a priority for their teams. To ensure adequate time was made for important performance conversations and other performance related activities, Fossil Group implemented “Performance Days.”
Performance Days are strictly dedicated to employee performance. No task-related meetings are scheduled, and all work is set aside for the day. Conversations between managers, employees, and teams are all centered on performance.
Performance conversations used to be based on subjective manager opinions. But in today’s data-driven world, that shouldn’t be the case.
Managers should approach performance conversations with rich employee data from a variety of sources. This data should help guide the conversation and build a more meaningful relationship between manager and employee. Bring data and examples from:
All of these are great ways to shed light on a variety of different aspects of an employee’s performance. The more data you can provide to add context to any difficult or even positive discussions, the more real your conversations will be. By leveraging performance criteria, an employee’s opinion of perceived fairness of performance review results will be all the more authentic instead of leaving a bitter taste in their mouth.
No one enjoys walking into a meeting blindly. Performance conversations are no exception. In order to give managers and employees the best opportunity to have a meaningful conversation about performance, both parties should work together to prepare a shared agenda and notes with key talking points.
This will relieve some of the anxiety around the conversation and will give employees a chance to contribute their thoughts and prepare for the meeting. It also allows employees to adjust the agenda to fit their needs. When employees are encouraged to bring topics they want to discuss, managers can focus on actively listening rather than lecturing.
Your meeting agenda should also include the time and location in which you are meeting, as well as any ancillary information to support the conversation.
Performance conversations are sometimes difficult. When employees aren’t achieving goals or objectives, these meetings can help determine why and how to help an employee improve. Start off on the right foot by aligning on expectations for the meeting itself. Here are a few tips:
Above all, managers and employees should have a shared understanding of what good performance looks like. When necessary, managers should provide clarity around each employee's role and how the organization perceives their contributions. By aligning expectations with your organization’s established performance criteria, your employees won’t feel misguided or alarmed when their review begins.
The third step to executing an effective performance conversation is conducting the performance review meeting itself. This section will overview:
Traditional performance reviews focus on past behavior and performance. While acknowledging past performance is important, if that’s the only thing you talk about in a performance review, you’re not going to drive future performance.
Performance conversations should give employees an opportunity to address and correct performance in real-time and continuously see how their work aligns with organizational goals.
Future-focused performance reviews also align with employee wishes for more feedback and development opportunities. Employees want immediate feedback so they can improve performance on-the-go, rather than waiting for their annual performance review. They also want to know you care about their future—whether that’s with your organization or not.
Asking (and inviting) the right performance review questions is critical. The right questions help keep you focused on the topics that are important to your employees’ and organization’s success.
Pro Tip: Use a performance review template that invites honest, genuine feedback and uncovers actionable ways to improve performance.
Here are a few good questions to ask in a performance review:
Managers who approach performance conversations with an evaluation mindset may make employees feel like they’re on trial. Ask these questions to shift your mindset from judge to coach. And always encourage employees to ask questions of you. By coaching your employees and inviting them to contribute to the conversation, you can work together to help them achieve their goals.
Your words carry a lot of power. They can be motivating to your employees or completely deflate their work and value. When meeting with your employees you’ll want to be thoughtful, considerate, and take the time to prepare.
While there are many ways you could approach a performance conversation, what not to say in a performance review is just, if not equally, as important as what to say.
Here are a few tips for choosing effective performance review phrases:
Performance conversations should be two-way, so make sure you’re facilitating a dialogue and actually listening. Listening to your employees helps you learn and understand rather than simply give someone equal talking time. Ask follow-up questions to help you dig deeper and paint a fuller picture.
Using emotional intelligence, you can tap into your and others’ emotions. Seek to understand how the other person may be feeling, and work to keep your emotions in check if needed.
Finally, participating in the conversation isn’t always about sharing your point of view. After an employee shares their feedback, repeat back what you heard. This gives you the opportunity to check that you accurately understood what the other person said. If you’re spending your listening time preparing your response, then you’re not actually listening to the other person.
A performance conversation shouldn’t end when the meeting is over. After the conversation concludes managers and employees should review notes, define next steps, and follow up with shared comments and feedback. Without these items, performance conversations feel unresolved. If you want your review to actually improve performance, creating an action plan is vital.
The final step to executing an effective review is the employee performance follow-up. After the meeting ends, employees will need continued support to achieve the goals you’ve created together. Keeping the conversation going and maintaining an open-door policy will ensure your employees feel supported and set up for success.
Performance conversations should happen regularly. When your meeting concludes, put the next performance conversation on the calendar. Better yet, schedule a series of conversations throughout the year. Whether these meetings occur quarterly or monthly, setting a regular cadence shows you are invested in your employees’ continued growth and development.
Even if your organization hasn’t made the switch to more regular conversations, it can be helpful for managers to establish an open-door policy with employees so that they feel comfortable discussing their performance all year long. Pairing this policy with 1-on-1 meetings and pulse checks throughout an employee’s lifecycle is a good way to move toward a continuous performance conversation model.
Searching for a way to motivate and align your teams’ performance? Find a tool to help do the heavy lifting. Look for performance review software that features:
Effective performance conversations are an essential part of your performance management strategy. Your performance management software should help you get there.
Navigate your next employee performance review without breaking a sweat! Our Performance Review Checklist will help you effectively prepare for, facilitate, and follow-up on your performance conversations.