Getting Ready for Annual Performance Reviews? Here’s How to Make Yours Work

For most companies the review process is confusing and unhelpful to both the manager and the direct. Here's how to change that.

The annual review season will soon be upon us. With that, comes much angst regarding how to evaluate your people. If bonuses are involved, it gets even more complex as you decide who should get how much of the pie.

As an advisor who works with dozens of companies on performance management strategies, I've seen a few things that work well, and I suggest these when leadership teams are looking to overhaul their review process. Here are a few big ones.

1. Review quarterly not annually.

One of the best changes you can make is to review more often. First, this offers employees more frequent feedback and multiple chances to set better milestones for their development.

Second, by reviewing more frequently, the organization gets better at doing it. Also, meeting more often means there is less to review which simplifies the meeting.

2. Use a role scorecard.

A role scorecard is used to define the scope and responsibilities of a position and how success is measured. Too often people are in roles without a clear sense of what they should be doing or how they will be measured.

Scorecards are as simple as index cards with the top priorities of a given role or as complicated as multiple-page spreadsheets. Personally, I use a one-page worksheet including title, name of reporting manager, key responsibilities, KPIs, targets for below/meets/exceeds expectations, and available resources.

3. Separate the performance and compensation reviews.

I suggest separating the performance and compensation reviews. While money can be motivating, it's typically restrictive and can skew behavior. It's better to keep the compensation review separate, or at least make a clean break in the agenda.

4. Collect multiple points of feedback

Rather than one manager putting their wet finger in the air, collect feedback from three to five people on specific behavior. Don't ask people if someone deserves a promotion or a bonus; that's the managers call.

Collecting input from different people gives managers perspective on their directs' behaviors. It also gives more credibility to results which will help managers during their conversations with their directs.

5. Provide specific examples

One of the best things to do when giving feedback is to provide specific examples of behavior and results. Bring copies of work products or descriptions of actions. Abstract ideas and generalizations can be easily misinterpreted.

6. Talk about what's going right

It's important to reinforce positive behavior. Often we assume people know what they are doing well, but that's not always the case. Call it out, be specific, and explain why it's good.

Avoid the feedback sandwich. People ignore the bread and usually only focus on the meat. Corrective feedback is something to be embraced and valued, not something to be ashamed of.

7. Set clear expectations for new behavior

When giving corrective feedback, it's important to be clear on what the new/different behavior or results look like. Simply telling someone that they are doing something wrong isn't enough. They are left with the 99 thousand other ways to try it. Giving clear examples of the right and/or desired way gives them a clear target.

8. Have them create a plan for change

Once feedback is given and the direct is clear on what needs to change, I suggest having them come up with their own plan of attack. There are two reasons this is helpful. First, the direct is going to own the plan and will be more committed to the process. Second, it means less work for the manager.

9. Ask what support they need

My management philosophy is hire good people who are self-motivated, point them in the right direction, and give them support. If you've given feedback and they created a good plan, let them run with it and simply ask them how you can help. You might be able to offer advice on a decision, an introduction to someone who can help, or a recommendation for materials or training, but let them ask for it first. Keep them in the driver's seat.

10. Establish a check in time frame

Any professional development plan requires milestones. Once you have a plan, establish what the next milestone is and when you'll meet to review their progress. Let them suggest the first plan. If you feel that's too far in the future, ask them to schedule a halfway meeting. If the pace seems slow, give them feedback that the plan doesn't seem to get them where they want to be in time. But let them replan; resist the urge to step in and take it over.

While assessing performance can be a little uncomfortable, it's the best way to drive organizational improvement. Keeping it objective, focused on the future, positive, and supportive will help minimize stress, while maximizing impact and driving real results.