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Eight Tips on Conducting an Effective Annual Performance Review

Managers find annual reviews to be time-consuming, while employees often see them as inaccurate and biased.  Here are eight tips for conducting an effective annual performance review.

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    Eight Tips on Conducting an Effective Annual Performance Review

    Eight Tips on Conducting an Effective Annual Performance Review

    Managers are about to engage in an annual ritual of reviewing their employees’ performance. In the ideal world, performance reviews represent a perfect opportunity to communicate an employee’s strengths, identify opportunities for improvement and carve out a plan for future development.

    In truth, many managers find annual reviews to be time-consuming, while employees often see them as inaccurate and biased. In one Gallup survey, for example, just one in five employees agreed that the annual performance motivated them.1

    So, what’s a manager to do?

    Eight Tips on Conducting an Effective Annual Performance Review

    1. Communicate the standards by which employees will be measured. This should occur well before any annual performance review so that employees understand what is expected of them throughout the year. If you neglected to do this, start articulating these expectations in this year’s performance review to set the stage for next year. You may want to consider having employees contribute to the goal setting to gain stronger employee buy-in.
    2. Make time for an unrushed performance review. Allot enough time to discuss all aspects of the performance review, including obtaining employee feedback. This also includes making the time to properly prepare for them.
    1. Understand the causes of underperformance. If an employee is underperforming, determine the cause. Is it a lack of individual motivation, lack of capability or job fit? Ask questions before jumping to conclusions. Knowing this will dictate the steps needed to redress the underperformance.
    1. Manager feedback is a year-round job. Performance reviews that surprise employees mean that a manager hasn’t done his or her job well. An effective manager will provide employees feedback on their performance throughout the year so that employees can work to manager expectations in real time.
    1. Keep the focus on development, not compensation. Avoid making the review about compensation. When the focus is on money, employees are less likely to hear anything else.
    1. Go deep on evaluations. Don’t just assign arbitrary grades; provide examples of where an employee shined or fell short. Obtaining input from other employees, both inside and outside of the department, can also lead to a fairer evaluation.
    1. Keep the focus on the work. Gauging personal traits like attitude are subjective and hard to evaluate on a fair basis. It’s more effective to say that deadlines aren’t being met (accompanied by examples) than it is to say someone is not working hard enough.
    1. Create a follow-up action plan. The whole point of annual performance reviews is to engage employees in a continuous process of self-improvement, which is why ending reviews with actionable steps that an employee can take to improve performance is so critical.

    Sources:

    1. https://hbr.org/2022/07/how-to-conduct-a-great-performance-review

    Please reference disclosures at: https://blog.americanportfolios.com/disclosures/

    About The Author

     

    Vice President of Human Resources 
    631.439.4600, ext. 280 

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