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Annual Performance Reviews: How Managers Can Make Them More Effective

Feb 22, 2021

Portrait of tired young business woman at the officeDoes anyone—employer or employee—enjoy annual performance reviews? It isn't enough for performance reviews to be "positive." The best annual performance review I ever had sounded like it had been written by my mother. But I also knew, right there in the midst of it, I was being called to leave and start my own business. I did.

This speaks to how important annual performance reviews are, how influential. As a manager, you can't keep every good employee from leaving. But you can (and should) turn any performance review—annual or not—into a tool for more employee engagement. Here's a framework to help you get started. 

1. Try not to call it a performance review

“But if thought corrupts language, language can also corrupt thought.” — George Orwell

I'm not suggesting for a moment that you resort to a euphemism. Reviewing performance is part of the deal. But human beings are so much more than their "performance." This is why I'm not a fan of the phrases "human resources" and "employee onboarding." Something about them sounds dehumanizing.

You know this, of course, but your team is made up of living, breathing souls with dreams, ambitions, gifts and stories. They want to engage. They want their work to matter. Performance is one dimension of this—and yes, performance matters. 

But if you've got the right people working for you, it behooves you to review the factors that play into performance. To name a few: 

  • Communication—is it clear, consistent, respectful and timely?
  • Clear expectations—how sure are you that everyone on your team knows who's responsible for what? 
  • Realistic workloads—having unrealistic workloads is one of the top drivers of burnout

What if you just called it an annual review? Or semiannual review? This allows you to cover performance, without limiting you to that one metric—and without making the whole exercise sound so heavy-handed.

2. Rethink how you structure annual performance reviews 

"I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel." — Maya Angelou

Along with rethinking the name, it might be wise to rethink how employee performance reviews (or just plain reviews) are structured and scheduled. Here are some of the mistakes I've seen managers make: 

  • Poor timing—for example, conducting the review during the employee's busiest time of year, or on the heels of an unpleasant confrontation (I have seen this happen)
  • Assigning every aspect of performance a grade or number; some might find it motivating to know they received all "5" ratings, for example; others would find this demeaning and demotivating—including those who received all 5 ratings
  • Conducting the review from across your desk; notice how punitive this can feel—like being sent to the principal's office. If you want performance reviews and working relationships to be collaborative, consider a more neutral setting; something as simple as a small round table, even if you're still sitting across from each other, can allow for greater employee engagement
  • Using the annual performance review to ambush and unload; every manager knows, or should know, annual performance reviews should hold no surprises

This is why you may choose to conduct reviews more often than once a year. Younger employees in particular (Millennials and Gen X) thrive on feedback. They like to know where they stand. Feedback gives your team an opportunity to grow, improve and excel—three hallmarks of high performers. 

Here's an excellent resource for performance review templates

3. Choose employee performance review phrases with care

"Your last words linger." — Patricia Fripp, on delivering a speech

When you're writing and conducting a performance review, all your words linger. You have the opportunity here to build bonds of mutual respect—or give off a schoolteacher vibe. A sampling of what came up when I researched employee performance review phrases. These were held up as so-called good examples:

  • “Applies creative thinking to implement a vision for the company.”
  • "A loyal and trustworthy employee." 
  • "Does not deviate from the attendance policy outlined in our employee handbook."
  • "Excels at developing strategies that deliver results."
  • “Breaks a problem down before analyzing it in a more detailed manner.”

On one hand, there's nothing wrong with any of these behaviors. But ask yourself: Would any of these phrases inspire you? Would you come to work each day more energized if your boss said you excelled at developing strategies that deliver results? Or that you don't deviate from the attendance policy?

One of the best compliments I ever received in a (six-month) performance review was my boss's simple, heartfelt statement, "I'm delighted you're here." How can you let your team members know you're delighted they're here? 

4. Balance constructive feedback with solutions and support

Solutions-and-support implies a willingness to invest in employee success. It also implies follow-up after the review. So for example, if there are ways the employee needs to improve, here are some points to cover:

  • What does improvement look like? It's much easier to hit a target that's been clearly defined.
  • How will you and the employee know when success has been achieved? 
  • What steps will be helpful or necessary for the employee to improve?
  • Might this new performance standard merit some additional training or other tools?
  • What questions does the employee have?  

There's no question that course-correction is sometimes needed. Sometimes it is needed desperately. But if you can approach it with empathy and humanity, you are more likely to be met with acceptance rather than resistance.

Are annual performance reviews effective?

Yes, they can be. Annual performance reviews are as effective as you make them. A few final keys to success:

  • Involve employees in the process
  • Give them a voice; for example, let them share feedback with you as well; not in the manner of a performance review, but simply in the spirit of "We're on the same team, and here's what would be helpful for you to know"
  • Make your expectations clear, and make sure they have the tools and training to fulfill them

Finally, resist the urge to give a performance review (or write one) when you're upset. As the saying goes, "Speak when you're angry, and you'll give the best speech you ever regretted." Even when it's challenging, use performance reviews to build relationships. It starts by building up the person in front of you.

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