Complete Guide to Employee Performance Reviews

Complete Guide to Employee Performance Reviews

Learn what they are, how to prepare, and tips for conducting great performance reviews

Annual performance reviews are challenging for everyone, but they’re also a valuable way to connect with each and every one of your employees. If you’re going into them feeling a bit nervous, chances are the person on the other end of the conversation is feeling the same way. It’s normal to have feelings of anxiety or discomfort – that’s what happens when people get honest with each other. But if you follow the steps and remain calm and open, the performance review can be a valuable tool to improve not just your employee’s work, but your own work as well.

Andy Grove, the father of OKRs (Objectives and Key Results) called formal performance reviews “the single most important form of task-relevant feedback.” A mastermind at setting company goals and tracking progress, whether big or small, he would certainly know the value of sitting down with someone and figuring out what works, what should be celebrated, and what should be adjusted. 

So, take a cue from Andy and start celebrating the performance review process with these helpful tips and reminders.

The basics

What is a performance review?

At its core, a performance review is a meeting of minds. As a manager, you should see it as a time to have a conversation about what’s working (or not working) for your employees, and how they can improve performance. Typically, performance evaluations are done annually or twice a year, giving you a concrete reason to meet with your employees, offer feedback, and hear from them about any concerns they might have.

Good performance appraisals:

How to prepare for a performance review

The media has done a lot to dramatize the worst-case scenario for employees: coming into a performance evaluation thinking you’ve earned top marks only to find your boss is sorely disappointed. But ideally, both managers and employees should walk into a performance review highly prepared to discuss the issues at hand. Here’s how to prep for a good performance review: 

5 Tips for conducting good performance reviews 

  1. Less is more. Once you’re at the table, remember that less is more. You’re not there to cover every single aspect of this employee’s career; after all, this isn’t a job interview. What’s more, people can only handle a certain amount of information at once. Instead of spouting off a list of all your observations, see if you can consolidate them into a handful of messages or “trends” that will resonate. 
  2. Practice the “3 L’s.” When moderating your own conduct, practice the 3 L’s: Level, Listen, and Leave yourself out. Be honest and straightforward with your employee, and practice active listening, which may mean talking a lot less than you’re used to. Finally, keep personal distractions, stories, and gossip out of the conversation. That way, you’ll be able to focus entirely on your employee, and your employee will sense that and be more open and honest with you. 
  3. Speak to strengths and opportunity areas. The bulk of your performance discussion should be about addressing strengths and weaknesses. Provide constructive feedback that is applicable to many areas of an employee’s work, not hyper-specific comments that would be better suited for regularly scheduled meetings that focus on day-to-day tasks.
  4. Solicit feedback. Make sure to leave plenty of time to solicit feedback, and again, remembering the 3 L’s, really listen to what your employees are telling you. There may be ways you can be a more effective manager to them, which in turn will only help their performance. 
  5. Stay calm. It’s possible that an employee may get emotional—reacting with either sadness or anger—at a performance review. De-escalate the situation by remaining calm, and being sure not to react emotionally as well. Keep your comments focused on the work, so as not to get personal. If an employee needs a few hours off to get back on track, or even the whole day, be sure to offer that time. Sometimes coming back to a certain task after a break can give us a whole new perspective.                                                                                             

What to do after a performance review 

Make sure to continue the dialogue you started with the performance review; an employee’s performance is ongoing, so the conversation around it should be too. But just as your assessment may continue after the review is over, so will theirs. Take time to check in periodically about their perceptions of your management style, to show that you care what they had to say about you and are willing to act upon the feedback you asked them for. Take time to reach out to your top performers and make them feel heard. 

Finally, remember that if you remove the hierarchies, the performance review is really just a conversation between people who want to succeed in their careers and contribute productively to their company. Performance reviews are one of the building blocks of being a good manager, and a crucial tool to company success. Like so many tools of the workplace, it all depends on how you use them.

https://vimeo.com/533743479

Pareto Labs offers engaging online courses in business fundamentals. Built to help you elevate your game at work, our courses distill complex business topics—like how to read financial statements, how to manage a team, or even how to value a business—into digestible lessons. No business background required. Sign up for a course today and get the first 3 lessons for free.