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.

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.


Five Traits Of Great Leaders

After working with leaders over many years I have found that there are five clusters of traits which set truly great leaders apart. These five clusters are:

  1. Cognitive abilities (vision and strategic agility)
  2. Self-confidence
  3. Results-orientation (unparalleled drive and determination)
  4. Integrity
  5. Sociability






There are proven methods to develop those leaders with these traits to help build a leadership talent pipeline in organizations. These are presented in my recent article in Leadership Excellence magazine (page 18) titled “True Leaders – They Possess Five Traits” and it also includes the seven best practices for developing and retaining great leaders.

Creating Effective Talent Management Programs

Like it or not, the successes and failures of talent management are still placed squarely on HR’s shoulders. As the economy continues its steady improvement and housing prices return to the pre-recession levels, key leadership performers will again become mobile and start leaving their current employers. So any weakness in a company’s talent management program will soon become exacerbated in the new economy.


One fatal flaw in many HR talent management strategies is the failure to link them to the business strategies and requirements. Once the HR team successfully links their strategies for the talent management process to the business and begins to communicate using vision, strategy and leadership, the company’s leaders will better understand how HR actually adds value to the business (see above graphic for how to do this). When HR doesn’t tie their expense and investment capital to the business, they will continue to suffer from an “expense and cost center” perception and always be resource constrained.

In working with many senior HR leaders over the years to improve HR effectiveness, this type of strategic approach (linking HR talent management goals with business goals) along with better communications has made a step-change improvement in the perception of the HR leader and their functions. Consider using something like the above approach with your key business leaders and you’ll begin to experience the positive impact on your HR department.

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.


12 month leadership development plan & toolkit

The Future of Leadership Development

It’s proven that the formula for developing leaders is 70% – 20% – 10%.  70% of learning is through on-the-job experiences, 20% is through other people by exposure to coaching, feedback, and mentoring, and 10% is from classroom education.

Unfortunately, most C-level executives feel that by sending managers to classroom training they will become leaders after five days of intensive case study discussions. CCL research suggests the following continuum for effective leadership development:


It is a blended approach to leadership development with very little classroom training as the catalyst to learn leadership. A great way to help high potentials develop their leadership skills is to do some combination of the following:

1. Provide for temporary assignments (3-6 months) where they have a challenge they may not have faced. For example, a client had an open territory and assigned a high potential to lead the territory and find his replacement.  This gave him the opportunity to see if he could stage a turnaround in employee engagement and sales, while he kept his current job.

2. Assign high potentials to special taskforces or have them lead the taskforce. Typically, there are enterprise-wide business and organizational issues that are under review and change.  Exposing a strong functional leader to these taskforces broadens their perspective and gives senior leaders the chance to see how they operate at a more strategic level and requiring broader influencing skills. For example, a client was developing a new field organization structure and had high potentials from all functions on this temporary taskforce to conduct the analyses, make recommendations, and help with implementation.

3. Rotate leaders so they can get exposure to parts of the business, cultures, and functions that cause them to have to develop and display a level of leadership they have not in the past.

4. Set up the mechanism to place high potentials on Boards for non-profits and industry associations to develop their leadership and broaden their exposure to how businesses operate.  A client has the Director of Community Relations place senior leaders on key non-profit Boards in their respective communities giving them valuable insights to running a business while helping the organization with key skills they would not be able to hire.

5. Assign senior mentors to high potentials so they can get guidance and sponsorship across the enterprise to continue developing their leadership skills.  It is important to create a mentoring program in terms of preparing mentees and mentors for their respective roles, time requirement, and mentoring skills.

6. Rotate high potentials into the Learning and Development Function where they are able to teach and facilitate leadership, sales, and quality programs in the enterprise.  This provides exposure into Corporate and across functions to broaden their perspective and networks for future senior leader roles.

As you start 2014 and begin to prepare your next generation of leaders it’s time to be purposeful in assigning work and roles so that you can use every opportunity to develop their leadership skills on the job.

12 month leadership development plan & toolkit

Improve Employee Engagement Levels


Many CHROs are faced with a dilemma on how to improve their organization’s productivity and business results. The HR science has demonstrated over the past 15 years that companies with highly engaged workforces outperform their competitors by significant margins. But what happens when the senior leadership team is not supportive of what is required to achieve high employee engagement levels and may not have the requisite skills to pull it off?

A 2013 research study by Stanford University’s Center for Leadership Development and Research, Rock Center for Corporate Governance, and Miles Consulting surveyed U.S. Board members and CEOs regarding performance appraisals. The results offer some instructive facts that will help CHROs.

As a top-line study summary, CEOs are appraised on accounting, stock price or operating performance and strategy development. In CEO performance appraisals, little weight is placed on innovation, succession planning, internal talent development, employee satisfaction and turnover, and safety. In addition, they found that CEOs had very strong decision-making and planning abilities but they were weak in mentoring, internal talent development, listening skills, and conflict management skills.

That’s the dilemma faced by many CHROs who are saddled with colleagues who are focused on short-term results. And it’s no wonder when the system is geared to incent and retain CEOs and senior leaders for financial performance.

If you find yourself in a similar situation there are some steps you can take to rectify the situation. Start by educating the CEO and senior team with their peers from companies that have supported high levels of employee engagement. Discuss with the senior leadership team common goals and direction of the company. Then, identify opportunities for improving employee engagement. Once these steps have been identified, then a comprehensive employee engagement survey can be developed and conducted to learn additional areas, from the employees’ perspectives, for increasing employee engagement.

Does your company conduct annual employee engagement surveys? Why or why not? And if so, does the company implement an action plan based on the feedback? Let us know what works for your organization.

Helping New Leaders Succeed: New Leader Onboarding Toolkit

As part of Corporate Performance Strategies continued dedication to help new leaders succeed, we offer a New Leader Onboarding Toolkit. This resource provides a sample 90-day transition plan and outlines the 3 phases and key objectives for new leaders to focus on during their first three months in their new position.


Research shows that about 50% of newly appointed leaders fail to meet expectations within the first 12-18 months in their leadership role. Our proven executive coaching tools and methodology have helped leaders improve their performance and effectiveness to keep up with new job requirements, changing roles, higher expectations, and other performance-related challenges.

We offer several leadership resources on our website including articles, whitepapers, videos, self-assessments and more. Visit our website today to take advantage of these complimentary tools and begin to improve your leadership performance today.


Best Practices for an Effective Talent Management Program


How do companies continue to cultivate and grow a strong crop of leaders to keep up with their business successes? It is tough to do this these days with limited time for leaders to devote to their own development, cost containment initiatives, and a belief by some CEOs that leaders are born not made.

It’s helpful to look at role models for great leadership and P&G stands out with their success over the decades. In a recent interview, Bob McDonald, P&G’s CEO, commented on why they have been so successful over the years in developing great leaders. According to McDonald they:

  • Seek to hire the best from college campuses around the world. Bob spends time on campuses throughout the year.
  • Create a “promote from within” culture where leaders are rewarded and promoted when they have groomed their successors.
  • Take steps to ensure hiring experienced workers is rigorous. They go to great lengths to hire the best. Only 5,000 new hires are made from an applicant pool of 900k.
  • Have line leaders lead the process with HR as an enabler. These leaders are personally accountable for producing the necessary bench strength to keep pace with the business requirements.

There are many examples of companies who do not develop leaders or create an effective talent management program: Best Buy, HP and others. They fail to take advantage of this business opportunity and lose momentum, shareholder value, and the public’s confidence. Would you rather have your legacy be associated with developing future talent, creating successful leaders and improving employee engagement? Or would you prefer your legacy be connected with the alternative?