Best Practices For Yearly Performance Reviews

As the year winds down, many leaders are planning yearly performance reviews for their team members. And since preparation is the first step to conducting a successful performance appraisal, below are “best practices” managers should keep in mind as they evaluate their team.


Do you naturally view the employee in either a “good” or “bad” way? Did you previously hold their job and are you expecting them to perform it as you did? Are you turned off by certain aspects of their behavior?

Leaders are human so it’s common that they will have their own biases as to how the job should be performed. When leaders let their biases shade their evaluations of the employee, it doesn’t give a helpful evaluation of performance results. Appraise the performance of the person based on their attainment of goals set for them (the “What”) and their competencies (the “How”), and resources at their disposal. Make the performance review about the employee, not about how you would have performed the job. Common rating biases include: Halo Effect, Contrast, Similar to Me, Leniency, Harshness, Central Tendency, Recency, and Primacy. Review your numerical ratings to see if any of these may be distorting your evaluation. Remember, these are subconscious so you are unaware of the biases occurring!


Employees usually dread their performance reviews because it can often feel like a one-way dialogue, especially when the reviews are only held once a year. Instead, make it clear to your employee that this is a dialogue between the two of you to discuss their performance. Use open-ended questions (i.e. Can you give me an example? What aspects of your job are challenging?).

The employee should feel comfortable bringing up concerns or difficulties they are experiencing in their position with the knowledge that you care about helping them resolve those issues. Leaders should give each employee plenty of time to prepare for the appraisal and offer resources such as a self-assessment or form to complete that covers their job performance and goals as well as what obstacles they face in performing their job to their best ability (i.e. lack of resources or support from management). Be clear when talking about preparing for the review that your employee understands you expect their full participation, engagement and commitment to the process.


Employees will feel attacked if you ask questions related to their behavior, such as: “Why can’t you get the job done?” or  “You’re really shy and you need to come out of your shell”. Instead, it’s better to focus on their job performance as it measures against their goals and objectives in their position. Using the above questions, rephrase them and ask them this way: “What parts of your job do you find difficult to complete? Or what obstacles do you face when trying to complete the project?” and, “You have much to offer and some great ideas, so what can we do to help you speak up and contribute more in meetings?”


This is not the appropriate time to spring your dissatisfaction on your employee about an issue that you haven’t previously discussed with them. Yearly performance reviews can be fraught with tension, stress and anxiety, so please do not use it as your chance to dump your frustrations on your team member. Everything that is covered in the appraisal should be clearly outlined, previously set and communicated between the two of you. Any ongoing issues should be part of a continuing dialogue between both of you so that it’s only one part of the review, and even then, only an update on where things currently stand.


Unless you’re planning on terminating the employee, focus on providing more positive feedback and praise to your employee during the appraisal and offering new challenges for them to commit to during the next year. Yes, discussing job performance problems is an important and necessary part of the review process, but try to limit them to the top two main concerns or issues you have.

Be clear and concise on what you like about their job performance and provide specific examples. “I truly appreciated your willingness to take the initiative on the ABC Project. I know it’s presented some challenges for you, but I know you’ve got the ability to complete it successfully.”

When discussing any performance issues, it’s best to clearly state the issue and what the required performance should look like. “The ABC report was not completed and couldn’t be included in the project. The next time, I’ll need your report a week in advance so I can work with you to finish any incomplete parts.”


Gain the employee’s commitment to what changes he/she will make moving forward and new goals and objectives they will focus on. Then, you need to commit to the employee what you will do to support their efforts to be successful. Follow through with a casual meeting a few weeks after the performance review to discuss how things progressing. Make this meeting the first of many as you move towards a “coach approach” performance appraisal process in the future. This regular interaction with your employee will help to develop an open and honest dialogue leading to better communication, improved performance and increased employee engagement.

These best practices are just a beginning to improving your yearly performance review process. Consider conducting 360 degree assessments with your team so they can gain insight on their performance from all people involved in their performance (i.e. boss, peers, team members, etc.). The main goal of any performance review is for the employee to gain greater self-awareness which leads to improved job performance, greater job satisfaction and an engaged, highly productive employee for the company.

A Better Way To Approach Annual Performance Reviews

The annual performance review can lead to feelings of dread and is often viewed as looking at the past instead of planning for the future. How, then, can companies change the annual review to be a positive, forward thinking evaluation of an employee’s performance?

Try approaching performance appraisals, not as a once-a-year event, but rather as a continuous, ongoing coaching process during the entire year. This is a 180° turn from how it is currently handled in most companies.

Instead of reviewing the past, companies should encourage their leaders to regularly sit down with their employees in casual, non-stressful situations to give feedback for situations as it’s needed.


1. Where the employee is currently at in their career and where he/she wants to be.

Ask the employee what their career goals are, where they want to be next year, what they are doing to reach their goals, if they participate in or desire leadership training, and other similar questions.

2. How the employee is performing in their current position.

Discuss current projects and job responsibilities. Compliment them on successes and validate their efforts. Discover what areas they want to further develop.

3. What obstacles or roadblocks the employee is tackling on current projects.

Find out what frustrations your employee faces while trying to complete current projects and goals. Coach them to come up with ideas on how to resolve these difficulties through their own initiative.

4. Who the employee can go to for answers, mentoring, support, and assistance for their professional development as well as for completing projects.

Show your support by assisting them with ideas of where they can get help and answers to help them resolve issues and meet their goals.

5. When you will meet next.

Always end your current talk with an idea of when you can get together next.

If managers and leaders focus on spending a little time each month with their team members to ask the above questions, it will foster a sense of trust, support and motivation. The employee will feel a sense of engagement with their boss and that he/she truly cares about them as a person, not just for what they do in their role.

These one-on-one conversations between leaders and their employees helps managers stay current about projects as they happen. It is a proactive approach instead of a reactive one like traditional performance reviews.


Make time in your schedule this week to recognize someone who is doing a good job, coach an employee about resolving an issue and identify new goals for someone who needs a bigger challenge. You will be laying the groundwork for positive coaching interactions with your team now and for future success.

Why Do Employees Dread Performance Reviews?

You are not alone if you dread the yearly performance appraisal process. Research reported on earlier this year in the Wall Street Journal discovered that the perceived effectiveness of the performance appraisal process was directly related to employee satisfaction, and that negative feedback resulted in lower satisfaction regardless of the employee’s learning goal orientation.

When I asked for people’s opinions on yearly performance reviews in a few LinkedIn groups, the responses generally agreed that performance reviews are necessary but preparation, scope and timing of the performance appraisals can cause headaches.

“I find that waiting until the end of the year makes the process unduly stressful and too many otherwise important things get missed in the interests of keeping the meeting a reasonable length.”
“Unfortunately, the paperwork can be tedious.”

Another person responded that the company’s culture is a key factor to employees’ satisfaction and work performance.

“If an honest, open dialogue exists in your company it will naturally increase the satisfaction, dedication and productivity of all associates.”

I agree with these and all of the comments provided. Annual performance reviews are necessary to evaluate employee performance but the frequency they are conducted, what is covered during the meeting, and how the information is presented are critical to developing high-performing, dedicated employees.

Effective performance appraisals include frequent conversations throughout the year to discuss performance and progress towards goals between employees and their managers. Then when it’s time to sit down at the end of the year, there is a level of trust already established. The manager has a clear picture of the employee’s performance during the year from frequent contact, and the employee has received regular feedback to help improve their performance and guide their direction.

This consistent and regular dialogue can be as quick and easy as meeting for coffee weekly or monthly to discuss progress towards goals, provide appreciation for their performance, or feedback on a skill or behavior to develop. It’s this reliable communication that builds a connection with employees that improves their performance and productivity over time.

Annual performance appraisals don’t have to be a dreadful experience for leaders or their employees, but only taking time once a year to provide feedback, leads to lower satisfaction. No one wants to receive negative feedback all at one time and high-performing talent prefers regular communication that shows you value their contributions.

Start laying the groundwork for improved performance reviews today by connecting with one of your employees. Take them to lunch or stop by their desk to tell them how much you appreciate their hard work. You’ll be lifting some of the dread and anxiety surrounding their yearly performance appraisals.

Are Performance Reviews Really Necessary?

The end of the year is rapidly approaching and many companies are turning their focus to the yearly performance review. Unfortunately, most leaders and employees are dreading its arrival and take a “grin and bear it” attitude toward them. With this type of anxiety surrounding performance appraisals, it begs the question: Are performance reviews really necessary?

Performance appraisals developed as a way to ascertain productivity and relative merit with regard to getting a pay raise. Even today, many companies utilize the yearly performance appraisal to assess the employee’s work performance and progress towards goals in order to justify a raise or placing the employee on probation with the idea of showing them the door.

But with the changes to the way people work nowadays (remote workers, less supervision, more autonomy, etc.) is the way we execute performance reviews still valid and, if not, what is a better way to apply them? If we don’t have some way of “rating” employees’ job performance, progress towards goals, work ethic, attitude and behavior, then how do we reward good employees with raises and promotions while providing poor performers with the tools and direction to improve?

I believe that as long as a company or boss handles performance reviews as an annual “look back” event instead of a proactive plan for the future they will continue to have negative connotations for all involved. Employees need positive and constructive real-time feedback and honest dialogues with their managers on a consistent basis in order to have the tools and desire needed to truly improve their job performance.

All of these questions, ideas and concerns will be answered in a series of blogs I’ll write and post now through the end of the year. In the meantime, enjoy this slideshare graphic from WorkSimple on the History of Performance Reviews.


Mid-Year Performance Review Template


Conducting a mid-year performance review allows leaders the opportunity to evaluate an employee’s progress on predetermined goals, provide feedback on his/her adherence to standards and job responsibilities, and discover potential roadblocks to success. It’s the perfect time of the year to sit down with your employees and review their progress , gauge their commitment, and provide any necessary help so there aren’t any surprises at the end of the year performance review for anyone involved.

A mid-year performance review doesn’t have to be as long and thorough as a yearly review but it does have 3 key steps. Follow this performance review template and the action steps provided to have a successful mid-year performance review of your employees.

1.     Prepare for the Meeting

Thorough preparation is key to setting the right tone, covering the issues at hand, and developing a plan of action for the rest of the year. Many times as supervisors, we think we know our employees and can just “wing it” when it comes to the review. However, the employees will benefit greatly from your preparation and their own. Be sure the manager and the employee each complete the following when planning for the review.


2.     Conduct the Performance Review Meeting

To set a positive tone for the meeting, it’s important to hold it in a neutral, comfortable, and non-threatening location. Begin the session by reviewing the goals and topics of discussion. Then continue the performance review by covering the following:

  • Provide feedback on performance, talk about accomplishments, job responsibilities and expectations
  • Determine any progress towards goals and how well performance is meeting or exceeding expectations
  • Solicit and address any concerns the employee has
  • Express commitment to employee’s continued development and career success
  • Close meeting with summary of what was discussed and agreed on, and confirm follow-up actions

3.     Complete Follow-Up Actions

Schedule a date with the employee for a follow-up meeting to discuss progress towards the goals and agreements made in the mid-year performance review. It is up the employee and the supervisor to follow through on the agreements and commitments made during the review.

By conducting mid-year performance reviews now, you will be saving yourself any headaches and surprises down the road by continuing to gauge the progress towards performance expectations and achievement of an employee’s job responsibilities and goals. It will benefit the employee by knowing their supervisor is invested in his/her success and profits your company by understanding which employees are engaged and dedicated to progress, and which ones aren’t.


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