A guide to performance reviews
How to make the performance review a meaningful and energizing conversation that is much more than a box-ticking exercise
In this guide:
What is a performance review?
A performance review (aka performance appraisal, performance evaluation, or employee evaluation) is a method to evaluate and document an employee's job performance and behavior in a given period – typically six or twelve months.
Discussing performance in a structured review is a cornerstone of many organizations’ employee feedback and development processes. Keeping a formal record of employees' performance can also be a compliance requirement.
In modern feedback cultures, performance reviews are just one of many events in which recognition and constructive feedback are shared. The annual or bi-annual review supplements ongoing feedback conversations – like 1:1 meetings – and provides a clear path forward.
The purpose of performance reviews
Lately, the annual performance appraisal has been met with pushback. With lightweight, real-time feedback available, sitting down to discuss the past year’s worth of assignments can feel untimely and unproductive.
But when done right, performance reviews become a key method of employee reflection and refocusing work. Just as formal employee evaluations cannot replace instant feedback on day-to-day work, continuous feedback alone doesn't allow for the holistic reflection that performance reviews facilitate.
Employees need (and want) to know where they stand and how to improve. As such, Gallup highlighted clarity on expectations as a key driver of employee engagement. Performance reviews allow team members and their managers to agree on what’s working and what isn’t, and align on the best way forward. After six months or a year of reflection, the content of a formal discussion is bound to be important.
A big picture review also aligns an individual’s work with larger department goals and the company mission. With this in mind, setting goals and clarifying expectations will leave an employee with a fresh mindset on where they stand and a clear vision for their professional development.
Traditionally, performance reviews have been used as a basis for making pay decisions. An evaluation on paper, signed and agreed to by both parties, is often used to provide context and justification for whatever comes next. In case of any legal dispute – say, a former employee claims they were fired for reasons unrelated to their performance – a formal record of an employee's performance may also prove helpful.
More and more companies, however, are using performance reviews primarily as a tool to support their employees' growth and development. In times where retaining and developing talent is a means to survive as a business, a time-consuming process that only serves an organization's compliance needs feels out of place.
Despite the recent trend of companies ranging from Google to Deloitte ditching performance reviews, it’s important not to fall into the trap of giving up tried and true practices. Many people know and expect a formal performance review. Rather than dropping formal feedback, understand why you’re giving it and maximize its results.
Separating pay and performance reviews
Discussing pay and performance in the same conversation can compromise honesty, company culture, and the ability to grow. That's why it's becoming more popular to separate performance reviews from conversations that lead to pay or promotion decisions.
By removing pay from performance reviews and being explicit about the alternative framework for determining pay, companies can maintain a pay-for-performance culture without sacrificing opportunities for employee development.
The performance review process
Review processes tend to be overly complicated. People can feel like they spend more time in evaluations than actually driving professional growth or getting work done. Luckily, it doesn't have to be like this.
The employee appraisal should be simple and engaging, and even more so if it’s only one of many feedback and coaching opportunities in your performance management process.
A lightweight performance review process can look like this:
Step 1: Write down the feedback
- Self-assessment: the team member reflects on their job performance by answering a set of questions about their contributions and behaviors.
- Manager's assessment: the manager answers a set of questions about the team member.
Step 2: Discuss the feedback in person
- Performance review meeting: After the employee and the manager have shared their feedback, they meet to discuss it and potentially come up with next steps. (Consider discussing goals or action items in a separate meeting to have more time to let the review sink in.)
Step 3: Sign the performance review
- Managers and team members adjust the written assessment based on the previous discussion (if necessary) and sign the performance review. With signing, both parties confirm that they have completed the process, including the in-person conversation.
Simplicity is great, but there are a few things that might be worth adding to your performance reviews to enhance their effectiveness.
- Upward feedback: The team member writes upward feedback for their manager to make the performance review a two-way conversation that both parties can learn from.
- 360-degree feedback: The team member requests feedback from up to five colleagues that they have frequently worked with to get a more balanced view.
- Calibration: HR and managers from different teams compare the assessments of their team members to ensure that feedback is unbiased, fair, and comparable.
360° feedback: a well-rounded review
As the name suggests, 360° feedback (aka 360 reviews or peer reviews) is where an employee receives feedback from multiple angles within an organization. This feedback mechanism combines input from a number of sources - peers, direct reports, managers, self-assessment, or even customers.
Why 360° reviews?
Managers don’t see everything. 360° feedback helps avoid blind spots and biases influencing the assessment of employee performance. Making 360s part of appraisals allows for employees to be recognized for their full range of contributions to the organization, beyond the work tasks their reviewer might already be aware of.
If you’re interested in introducing more regular, multisource feedback into your organization, 360s can be a great place to start. But according to psychologist Kenneth Nowack, poorly designed 360-degree feedback assessments can increase disengagement and contribute to poor performance. So implementing 360s mindfully is crucial. Through this, companies can diversify feedback and gain rich results without overwhelming their teams.
Tips on implementing 360° feedback
Culture comes first. Having an open feedback culture can help employees feel comfortable giving and receiving feedback from peers without mistrust.
Consider these tips when introducing 360° feedback:
- Transparency from start to finish. Be clear on where feedback is coming from and where it will go, specifying what, if anything, will be anonymous.
- Screen the sources. Having the right contributors is crucial for effective 360s. Diverse perspectives are key! Consider having employees nominate their reviewers to find the most relevant sources of feedback.
- Short and sweet. Feedback surveys should be short, clear, and relevant to the recipient’s job. Especially when recording multiple responses, being concise is key.
- Consider using dedicated software. Many companies conduct 360° feedback through online programs. It’s easier to facilitate, tally, share, and control anonymity.
Performance review questionnaire templates
A performance review is made up of questions, so you want to make sure you’re asking the right ones. What you ask in your review form is influenced by many factors. The role you’re evaluating, your company culture, and your approach to feedback are just a few of them.
It’s worth thinking about what you want to achieve through your review, and whether your questions help you fulfill that purpose. Do you want actionable next steps? Do you want people to consider their impact on the business? Do you want to just have a conversation? Here are a few performance review form templates to get you started in the right direction.
The 2-question review
Depending on why your organization uses performance reviews, you might only need two questions. If you’re looking for a very short and simple way to start a conversation around performance, ask these questions:
- What did the person do well?
- What could the person improve?
Start, stop, continue
The start, stop, continue method is a popular retrospective design that also works for performance reviews. This structure focuses the conversation on specific actions that the employee should do more or less frequently.
The performance review questions look like this.
- Executive summary. Begin with a short overall statement about how things have been going during the period under review. People want to know how where they stand, and they shouldn’t have to read between the lines.
- Start. What are the things (behaviors, actions, attitudes, projects, tasks, etc...) the person could start doing that would help them make a bigger impact?
- Stop. What are the things the person could stop doing that are hindering their growth and impact?
- Continue. What are the things the person should continue doing or double down on because they were successful?
Structuring appraisals around multiple dimensions gives managers guidance on what exactly to assess. It also ensures employees are evaluated against the same criteria which can reduce the impact of biases. The dimensions you use depends and your organization's priorities, but we recommend to cover both functional and behavioral aspects.
How would you rate [Name]'s functional expertise?
How would you rate [Name]'s ability to execute?
How would you rate [Name] on contribution to our business strategy?
How do you rate [Name] on demonstration of company values?
Performance reviews that seek to evaluate an employee on their overall contribution to the company should use questions that reflect this. To assess impact, try using these sample questions as a starting point:
- Start with an executive summary, an overall statement about how happy you are about the person's impact on the team and organization.
- Reflecting on what the person achieved, how would you say they impacted the company? Consider results, company values, competencies, and team goals.
- In your opinion, what could that person have done differently to be more impactful? Or what could they do differently in the future?
Performance review ratings
While performance ratings are still the standard for evaluating employees, they have come under scrutiny for their lack of insight and failure to help employees grow.
Why do organizations use ratings in performance reviews?
Companies need a way to ground pay and promotion decisions, and employees want to know where they stand. For these purposes, ratings can be one way to evaluate employees. Ratings are an easily quantifiable and comparable metric.
Where ratings fall short
While ratings may be quick to give, they’re often hard to receive. “Your communication is a 3 on a 5-point scale.” So what? Even if ratings can identify areas for growth, they offer little guidance for the employee to actually grow in these areas. Studies have shown that ratings without guidance can be demotivating, especially for those who get below-average ratings, which in turn hurts performance.
Ratings have their role in performance reviews, but they also have their limitations. And this hasn’t gone unnoticed. Thirty large companies, making up 1.5 million employees, have already phased out ratings according to a 2015 study. But we must make sure that, if or when we phase out ratings, we replace them with a more effective feedback system.
How to make ratings meaningful
There are ways to keep ratings in performance reviews while addressing some of these problems. The key is integrating feedback alongside the rating.
- More than just a number. Statements paired with sliding scales (neutral, agree, strongly agree) or frequency scales (occasionally, frequently, almost always) can offer quantitative feedback without reducing performance to a number.
- Include an explanation. Pair ratings with open-text boxes to provide an explanation for your feedback. Some companies have taken to sharing only the explanation with the employee. This may, however, negatively impact on the transparency of the review process.
- Identify the path to future success. Offer actionable feedback on how the rating could be improved, encouraging employees through a clear path forward.
How to give effective feedback in performance reviews
Bersin by Deloitte research found that in 2018, the highest performing companies had “growth and development” as the primary goal of their performance review process. Back in 2006, the top priority was still “competitive assessment" for 80% of the companies surveyed.
With this trend of focusing performance reviews on professional development, many companies have replaced ratings-based processes with processes focused on qualitative feedback.
Whether or not you keep ratings, it’s crucial that managers know how to give effective feedback, keeping performance reviews positive and productive. Here are three tips on giving effective feedback:
- Be a coach, not a critic. Use this time to reinforce what’s working and adopt a coaching approach. It’s easier for people to take something they’re already doing and do more of it. It’s harder to be confronted with shortcomings and try to figure out a way to get better.
- Give feedforward. Rather than referencing a mistake in the past, suggest a solution for the future. This is what feedforward is all about. Instead of letting your coworker know that their presentation was too wordy, give them a suggestion to make them more concise in future.
- Share your point of view. Understand that your feedback is coming from your perspective and frame it accordingly. Be specific about what worked for you, when it clicked for you, and what didn’t make sense (again, to you). A first-person account can be more insightful than generic statements.
Performance review sample phrases and comments
Performance reviews should by no means be a copy-and-paste exercise. Comments given have to uniquely and accurately describe the employee’s performance. But if you’re looking for inspiration, here are some sample review phrases and comments.
Recognize key accomplishments made by the employee you’re reviewing that moved the company forward.
- You exceeded expectations with your work on __________ which resulted in __________ .
- You finished the project __________ ahead of schedule while still maintaining high quality.
Use examples of when the person lived one of your company’s values in a particularly impactful way. Making comments about value-related behavior is important in every organization that cares about culture.
- It was clear that you demonstrate the company value __________ when you did __________ .
- You contribute positively to our company culture by regularly __________ , a behavior that is in line with our company value of __________ .
Think about how this person’s efforts contribute to larger company goals. This automatically makes their achievements feel more meaningful and connected to the bigger picture.
- Your successful completion of the project __________ significantly contributed to the company goal of __________ .
- It was particularly impactful when you took the initiative to go beyond your assigned tasks and __________ , which contributed to the company goal __________ .
Highlight individual strengths that had a positive impact on the company. This can help the team member capitalize on their strengths or identify blind spots.
- In our team, you stand out for excelling at __________ , which has led to __________ .
- You have grown noticeably at __________ , a competency that helped you achieve __________ .
Reducing bias in performance reviews
Striving for fairness and objectivity is fundamental in performance reviews. Unfortunately, everyone has biases, and that includes managers.
Addressing unconscious bias is the first step to help you foster diversity and inclusion. Here’s a list of common biases, and how you can reduce their effect on your performance reviews.
Managers tend to focus on the most recent events and overlook events that happened earlier in the time period, which can hide important achievements and growth.
Try this: Use 1:1 meetings and other ongoing feedback mechanisms throughout the year, keeping a solid record that you can refer back to when writing your review.
A single positive or negative impression of an employee can influence the way managers view their overall performance. If a manager is particularly impressed by an employee’s performance in one instance, the manager may view that employee with a “halo” and assume that they also excel at unrelated tasks. The opposite effect occurs when a manager sees an employee struggle in one area and views them with “horns” and incompetence in other aspects of their job.
Try this: Evaluate performance in several defined aspects of work and have specific examples of behavior to back up praise or critique.
Managers who are inclined to give overly positive feedback leave employees unclear about how to improve, while highly negative managers can demotivate their team.
Try this: Do you tend to think of your team at a particular end of the traditional rating scale? Re-center your scale with a range of terms above and below your “go-to” rating.
Some managers are reluctant to rate at extremes. So they tend to put reports in the middle of the rating scale, leaving them without a clear takeaway of their strengths and weaknesses.
Try this: Even-number scales make a middle-rating literally impossible, but focusing on qualitative feedback instead of ratings is likely to be a more meaningful approach.
Managers can fall into the trap of finding new information that reaffirms their preexisting beliefs about an employees’ performance rather than truly examining all of the information.
Try this: Seek out feedback from others through a 360 feedback round, and pay special attention to anything that challenges your assessment.
When addressing a topic in a performance review, a manager can jump to the most obvious conclusion about what is important, as opposed to the less obvious but potentially more relevant ones.
Try this: Have team members share a self-review in advance to highlight key contributions that aren’t at the forefront of the managers’ mind.
Performance feedback given to women tends to reflect their workplace demeanor or attitudes, while men are more likely to receive feedback on past projects and accomplishments.
Try this: Plan to assess all employees on the same predetermined categories to avoid this unintentional disparity.
People are drawn to others who are similar to them, whether it be similarities in personality, behavior, skills, or background. When managers are more inclined to positively assess employees they relate to, this can leave little room for team diversity.
Try this: Review the criteria on which they are evaluating employees before entering a performance review.
The less structured a performance review is, the more room there will be for bias. Maintain consistency by outlining topics and criteria on which to assess every employee. Get feedback from multiple sources and really pay attention, especially if it goes against your initial perceptions.
Employees can only control their performance, not the bias in their review. It’s up to managers to recognize and actively fight their biases, and for HR to equip them with the knowledge and skills to do so.
Performance review software
Despite "paper-based" review forms now more commonly being created in spreadsheets or word processors, many organizations are opting instead to manage their performance appraisal through dedicated software.
The pitfalls of paper-based reviews
Here are some of the reasons why organizations are abandoning paper-based reviews:
- Paper-based systems take a long time for HR to set up and administer, and are equally tiresome for employees to complete as they trawl through files to gather evidence for their review.
- Filling out clunky word-processed forms can disengage employees, lowering the quality of feedback people offer in the review.
- Analysis of paper-based reviews can be difficult – inputting and cleaning data can take time, delaying actions from review findings.
These three main issues have driven an increasing number of organizations to seek out performance review software. These tools aim to automate aspects of the review process while improving the quality of reviews and offering simpler data analysis.
How performance review software can help
Core features of performance review software often include are:
- Automated nudging and email reminders to increase completion rates.
- Performance review form builders to make it easy for HR to build different questionnaires for different teams.
- A single source of information to collate feedback given throughout the year, and to set goals and track progress. This information is then readily available as people complete reviews.
- Integrations with workplace productivity and communication tools to embed performance management into employees’ daily routines.
- Analytics and reporting offering quick access to reports and clean data exports.
Yet with so many performance review tools on offer, it can be hard to pick the right one for your organization. Our advice: think about what you want to achieve first, and then choose the tool that is most likely to help you fulfill those goals.
Your organization is medium-sized, focuses on employee growth, and wants to combine the performance review with ongoing feedback mechanisms like 1:1 meetings and praise? Then have a look at our performance review tool or request a personal demo.
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