The performance review process aims to give employees regular feedback on how well they are doing their job, establish and monitor professional development objectives, and make sure that the company is achieving its business goals. Regular feedback can make employees feel appreciated and acknowledged for their work, which can boost their job satisfaction and motivation. Performance reviews can also offer useful information to management for making informed decisions about promotions, compensation adjustments, and resource allocation. It is the antidote for career stagnation.
Performance Review Cycle
One of the key aspects of managing people is to set clear and realistic expectations for their work. Think about what makes a particular employee do a great job. What tasks would they complete? How would they communicate with others? You should take the time to think about these things, and then write them down as a list of goals and behaviors. Your employee should know these things and understand how they will be evaluated.
Setting expectations isn’t a one-time event, but an ongoing process. You should review the expectations with your employee regularly and provide feedback on their performance. Feedback should be timely, specific, and constructive. You should praise your employees for their achievements and help them overcome their challenges. You should also be open to receiving feedback from your employee, and adjust the expectations as needed. By doing this, you can ensure they are motivated, engaged, and aligned with the company’s goals.
Once the person knows what is expected of them, you should monitor their performance and give feedback promptly and frequently. This way, you can help them improve their skills, correct any mistakes, and recognize their achievements. The moment to adjust course is not during a performance review meeting (after the fact), instead it should be done as soon as you notice something wrong. By doing this, you can avoid surprises, conflicts and resentment, and foster a positive and productive work environment.
Leadership, in charge of promotions and compensation adjustments, evaluate the performance and contributions of each employee. They should conduct this review meeting once or twice per year, depending on the company’s capacity to make changes in position and compensation. Each manager presents their case for their employees and recommends how to proceed with them. There should be no surprises in this meeting. All the issues should have been monitored and addressed in the previous period on an ongoing basis.
The employee receives clear communication about the result of their performance review. As with the performance review, the result should not be surprising. Based on the feedback they received over the previous period; they should be able to understand the decisions and outcomes of the performance review. The cycle repeats.
Define what success looks like
Start with the behaviors you expect from your employees. Make sure they are measurable, even if just in theory. Set high standards, but also be realistic. A good way to come up with these behaviors is by looking at your top performers and identifying what makes them stand out. This will be your reference point for the rest of the team. Some things you can measure include:
- Performance: How frequently the employee completes tasks, reviews, and supports other team members.
- Communication: How often the employee participates in discussions beyond their daily updates, engages in Teams or Slack, and shares knowledge with the team.
- Contributions: Instances where the employee delivered significant value for the company. This could be developing a new product, adopting a new technology, or enhancing an existing process.
Communicate responsibilities and expectations
Your employee should be crystal clear on what they need to do to get a positive review at the end of the period. Discuss with them their specific responsibilities, expectations, and stretch goals for their role. Give examples of the behaviors you’d like to see, but don’t use other people as examples (good or bad). Emphasize the benefits of meeting the expectations for themselves and the company. Explain how you will measure their performance and use it during the review. Encourage questions and dialogue and listen to their feedback and suggestions.
Avoid vague or unrealistic expectations that are unclear or unachievable. Don’t communicate in a negative or threatening way. Don’t ignore or dismiss their feedback and concerns.
Involve the employee
As their manager, you should guide your employees to perform well and highlight their achievements in the performance review session. Your employee is your ally in this process and should provide you with the evidence you need to evaluate them fairly. Performance reviews reflect how much effort the person puts into them. Your employee should keep track of their accomplishments and share them with you regularly so you can also document them. By the end of the period, both of you should agree on what will be discussed in the performance review session.
Create a document to record the performance of the person for a specific period. You can use any format that is easy to edit and save, such as Word, text or notes. Write down both positive and negative examples of their work as evidence. For example, you can include instances when they received compliments, worked overtime, took the initiative on challenging tasks, shared their learning outcomes, introduced, or improved a process or a technology in the company, etc.
Routine work should follow the rule “no news is good news”. If someone performs well, there’s no need to write an entry saying they’re doing their job. A simple way to monitor their performance is to write down the feedback given to them. It is important to add dates on these notes to avoid thinking one bad example represents their overall performance; they might just have a bad week.
If it’s worth discussing, it’s worth recording.
To track your employee’s performance, progress, and productivity, it’s not enough to set clear expectations. You also need to check in often with your employee to monitor their performance throughout the year.
When following up on your employee, you should measure them against four dimensions: performance, communication, contributions, and satisfaction and well-being. Performance refers to how well they complete tasks in a timely manner. Communication refers to how well they engage with the team. Contributions refer to how much they go above and beyond their role. Satisfaction and well-being refer to how happy and healthy they feel at work.
For performance and contributions, you can use metrics like tasks accomplished, projects completed, deadlines met, writing/code quality, etc. For communication, you can use feedback from peers, or other stakeholders. For satisfaction and well-being, you can ask your employee to rate their happiness, stress levels, and productivity on a regular basis. You should also ask them about their satisfaction with the processes, environment, and how they feel about you (their manager), the company, and the company’s leadership.
You should meet with your employee on a regular basis and give them feedback on how they’re doing. There are three main types of feedback: positive (when they meet expectations), constructive (when their performance could be improved), and developmental (when they’re not meeting expectations).
Positive feedback is when you praise someone for doing something well or achieving a goal. It can boost their confidence, motivation, and morale. For example, “You did a great job on the presentation yesterday.”
Constructive feedback is when you point out someone’s mistakes or areas for improvement and suggest how they can do better in the future. It can help them learn, grow, and solve problems. For example, “Your report was well-written, but it lacked some important data. Next time, make sure you include all the relevant sources and statistics.”
Developmental feedback is when you help someone identify their strengths, weaknesses, opportunities, and challenges and guide them to create a plan for their personal and professional growth. It can help them achieve their potential, career goals, and aspirations. For example, “You have a lot of skills and talents that make you a valuable team member. However, I noticed that you sometimes struggle with time management and prioritization. How do you think you can improve on these aspects?”
Identify which kind of feedback is most appropriate based on their performance and behavior. Write down your main points using clear and direct language. Begin with a positive remark, then share your feedback in a respectful and constructive way. Focus on solutions, not problems. It is crucial to give specific examples which backs up your points. Involve them in finding ways to improve and create solutions together. Ask for their input, listen actively, and rephrase their input. End on a positive note: summarize the main takeaways, express your confidence in their abilities and effort, agree on an action plan, and thank them for their commitment.
Feedback is a two-way street that can help both of you grow and improve. As a manager, you should not only give feedback to your employee, but also seek feedback from them. You can use the following strategies to receive feedback from your employee:
- Ask specific yet open-ended questions that invite honest and constructive responses. For example, you can ask: “What do you think I’m doing well as your manager? What are some areas where I can improve? How can I support you better in your projects?”
- Show genuine interest and appreciation for their feedback. Listen actively and attentively to what they have to say. Avoid interrupting, judging, or defending yourself. Thank them for sharing their thoughts and feelings with you.
- Acknowledge their points and work on solutions together. Reflect on what they said and how it affects your relationship and performance. Identify what actions you can take to address their concerns or suggestions. Involve them in creating a plan for improvement and follow up with them regularly.
Create a summary of the employee
The performance review session is a formal assessment of an employee’s work quality, achievements, and areas for improvement. It should be as objective as possible and based on clear criteria and evidence. To prepare a performance review, you should:
- Research and document the employee’s accomplishments, challenges, and feedback throughout the review period. This could include data from projects, reports, surveys, reviews, etc.
- Gather feedback from peers and stakeholders who have worked with your employee or have observed their work. This could include colleagues, clients, partners, vendors, etc. The feedback should be relevant and constructive and provide different perspectives on your employee’s performance.
- Create a summary of the employee’s performance that highlights their strengths and areas for development. The summary should also mention any feedback and guidance you have given to them during the period and how they have responded to it. End the summary with your recommendation for the employee’s rating (e.g. exceeds expectations, meets expectations, or needs improvement) and an action plan for their future development.
The summary will be used to discuss the employee’s performance during the review session. This summary should be treated as highly confidential since it contains sensitive information about the employee.
Review summary with employee
You should share the summary with the employee before the session and invite them to ask questions or provide comments. Nothing in their summary should be a surprise to the employee, but be prepared to explain and justify your assessment, especially if it portrays a less than ideal performance by the employee. You should ask for their input and be open to add or clarify items.
How to handle disputes or disagreements
Your employee may feel surprised, unfairly treated, or misunderstood by your feedback. To handle these situations, you should listen to your employee’ concerns, acknowledge their valid points, explain your feedback with examples, focus on solutions and action plans, and be open-minded to compromise and negotiate. If your employee still feels unfairly treated, you may use a conflict management framework or seek help from human resources or a mediator if needed.
Conduct the performance review meeting with Leadership
A performance review meeting is a way for leadership to assess the company’s talent pool. Every manager presents a summary of each of their employees to the leaders above them in the organizational chart. Another person who knows the employee well may also attend.
Managers should have 2-3 minutes to advocate for their employee, rate their performance (underperforming, performing, or overperforming), and indicate whether they’re a priority for retention initiatives such as promotions or salary adjustments. At this point, other managers can add to the summary and assessment. Managers may excuse themselves from the meeting once all their employees have been reviewed.
Leadership will review all employees and make decisions about promotions, salary adjustments, bonuses, etc. They will then notify people managers with the outcomes of the performance reviews.
Review outcomes with employee
Now it’s time to let your employee know leadership decisions which affect them. Good or bad, don’t spend too much time with a preamble or beating around the bush. Hit them with the news and then explain the rationale for the decisions, what the next steps are, and how you’re going to work with them during the next review cycle.