<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=2059727120931052&amp;ev=PageView&amp;noscript=1">

How to conduct more effective employee performance reviews

Individual employee performance is both important and impactful. That’s why it’s essential to get performance reviews right. But often, performance reviews are inconsistent. Employees and managers are not properly prepared. There’s confusion about where performance reviews should sit in a company’s overall performance management strategy. You’ve likely heard that annual performance reviews are unpopular and ineffective.

But with the performance review being such a crucial part of managing and developing your employees’ performance, what are you supposed to do?

This guide will help you determine what kind of performance reviews are right for your organization, how to plan review cycles, and how to implement your plan. It also offers suggestions and resources to help HR professionals get through what is often the busiest time of the year.

CC-Pillar-Header-Perf-Rev
Table of Content

    How have performance reviews changed?

    It’s likely that performance reviews at your company don’t look the same as they did in previous years.

    During the pandemic, many companies chose to delay their performance reviews. Even companies that continued conducting performance appraisals may have made changes to their review templates. For example, some chose to assess different core competencies like agility, flexibility, or adaptability. Other organizations took the opportunity to rethink the structure of their reviews to ensure they meet the needs of their employees.

    As workplaces adjust to new remote or hybrid environments or return to the office, performance reviews are making a comeback. However, a shift in priorities and workloads during the pandemic has had a lasting impact on the ways we evaluate and empathize with one another. Companies are offering feedback and performance insight more frequently and informally. Many have implemented a new digital review system and increased transparency around company goals.

    The bottom line? COVID-19 has fundamentally changed what employees expect from their performance reviews, how companies give feedback, and performance management as a whole. No matter how your company’s performance reviews have changed, ClearCompany has the resources you need to create an effective performance review process.

    CC-perf-review-11
    What you’ll learn in this guide
    1

    How to effectively structure a performance review

    2

    How to train managers in conducting performance reviews

    3

    How to conduct a performance review remotely

    How to prepare for a performance review cycle

    Conducting an effective performance review might seem simple — to those who have never done it before. However, for the HR professional, there’s nothing simple about it. The human resources team is responsible for deciding many of the foundational elements of a successful performance review plan. HR also monitors results and keeps track of the effectiveness of reviews.

    HR is involved in every aspect of building and managing performance review plans:

    Type(s) of reviews
    • New Hire Reviews (30, 60, 90 Day Reviews)
    • Competency and Roles-Based Reviews
    • Time-Based Reviews
    • Peer and 360 Reviews
    The frequency of reviews or review cycle
    • Quarterly
    • Bi-Annual
    • Annual Performance Reviews
    • Feedback Loop
    • Continuous
    Employee evaluation criteria
    • Employee Goals
    • Company Performance
    • Hiring Competencies
    • Earnings
    • STI/LTI Compensation Schedules
    Constantly and consistently gather performance data from a variety of sources
    • Microfeedback platforms
    • Reward and recognition program
    • Manager and team lead feedback
    Build processes and documentation to support your reviews program
    Find and assess the best technology to support an efficient, effective performance review process
    Select, train, and prepare managers on effective performance review practices
    Manage employee responses and feedback post-review, including dissatisfaction
    Document and manage goals and performance data throughout review cycles
    How have performance reviews and expectations changed?
    How have performance reviews and expectations changed?
    Predictive Performance Analytics
    How to conduct a successful performance review
    Tips on conducting a performance review remotely
    The best way to structure a performance review
    What to ask during a performance review, including conversation starters and prompts for employees
    How to effectively train managers in performance reviews
    Writing effective goals for performance reviews
    Ideas for successful performance reviews
    Best practices for giving a performance review
    Performance reviews post-pandemic

    How to conduct an effective performance review

    HR professionals need to understand how to conduct an effective performance review. This skill also prepares you to train managers and leaders to give reviews.

    During an effective performance review, employees are informed of and evaluated on their past performance. Managers recognize outstanding performance or discuss inadequate performance. Employees and managers collaborate on areas for growth, how to improve performance, and plans for the future.

    Addressing these four points are pillars of an effective performance review:

    1. Illustrating to employees how their goals fit into the company’s bottom-line goals

    2. Connecting constructive performance feedback, as well as praise and recognition, to employees in a personal way

    3. Creating a feedback loop that is both fair and meaningful for employees

    4. Aligning performance management with business priorities and company values

     

    CC-DigOnb-1

    When you establish a performance review cycle that hits all these notes, both your company and your employees will benefit. No matter how you choose to structure your plan, performance appraisals are a key part of any performance management strategy. After determining the right approach for your company, you’ll need to prepare for the next review cycle — and help employees and managers prepare, too.

    Before the Performance Review:

    • Get to know who your employees are based on their interests, strengths, personalities, and work style.

    • What defines great, good, or poor performance? Define your ideal comprehensive list. The list may include:

      • Job-specific tasks

      • Contextual behavioral performance

      • Specific and measurable goals

    • Record your employee's performance through an automated system to help you keep better track of reports and ensure timely feedback.

    • Make use of self-assessments to get employee feedback and create a comprehensive view of performance.

    • Focus on building lasting relationships and trust with each employee. Ultimately, performance reviews are in place to guarantee that employees have the essential tools to succeed in their roles.

    • Assemble a list of opportunities and goals with your employees to help them develop, improve or maintain their performance. Hold them accountable for achieving those goals.

     

    Performance Review Tip:

    Send out self-assessments for your employees ahead of time. Ask them to consider current performance, skills they want to acquire or improve, and where they see their career heading. In the meantime, ensure you understand your opinions on employees' performance and goals and how that impacts or supports company goals.

    Clarity goes a long way toward a more effective performance review. Ensure your feedback and expectations are clear and encourage employees to ask questions if something is unclear.

    During the Performance Review:

    • Be sure to give positive feedback on tasks that the employee has done well through the course of their position.

    • Assess employees’ job performance honestly and thoroughly. Make sure to explain the factors that went into their overall performance rating.

    • Ensure that both you and the employee have a shared, complete understanding of the employee's duties and tasks. The difference between excellent and poor performance should also be mutually understood.

    • Thoroughly explain to the employee how performance is measured and provide reasoning behind high or low ratings.

    • Provide as many (specific) examples as possible. Feedback is only effective when you clearly explain which areas need improvement, rather than just generally stating that performance needs improvement.

    • Feedback should be focused on improving performance. Offer guidance or develop a plan for how the employee can do better.

     

    • Provide a clear explanation regarding any actions the employee needs to take to improve performance. Ensure that the employee understands the designated actions.

    • Always clarify and be open to questions if an employee is unsure about the feedback that is presented.

    • Ensure that strengths and weaknesses are highlighted. Once identified, managers will be able to assess what training needs to be done. Combining performance feedback with a plan for the employee will allow them to perform their job effectively.

    • Set new performance goals for the employee. Don’t forget to plan for how to accomplish those goals and a timeline for their completion.

    • End the performance review on a helpful note. Let employees that you are there to help them succeed and achieve their goals.

     
    After the Performance Review:

    • Schedule a follow-up meeting with the employee to create a personalized developmental plan.

    • Tie your company’s core objectives into the individual’s performance. Managers should align individual goals to company objectives to motivate and engage employees. This allows them to see how their performance contributes to the overall company objectives.

    • Take time to develop contextual performance goals with the employee that includes set tasks. When developing goals, establish SMART goals: specific, measurable, achievable, relevant, and timely.

    • Don’t wait until a formal performance appraisal to address issues or successes with employees.

    • Set up weekly or monthly meetings to review the individual’s progress. Use this time to ensure they are still on track to complete their performance goals.

    • Request input or advice from other members of your team to enhance the employee’s performance.

    Performance Review Tip:
    43% of highly engaged employees receive feedback at least once a week. Use weekly check-ins or other regular meetings to bring up performance concerns or successes with your employees.

    Performance review tips

    Why performance conversations matter so much

    Performance reviews are so valuable because of the dialogue they open up between employees, their managers, and the company. Regular conversations about an employee’s job performance, engagement levels, contributions, and other key metrics gauge job satisfaction and productivity. These conversations provide a space for two-way feedback and performance evaluation centered around job duties. That time can also be used to consider compensation, bonus, or promotion opportunities.

    Performance conversations also help strengthen the relationship between supervisors and employees. They provide time for individuals to provide feedback on how well their own needs are being met. It’s an opportunity for managers to provide valuable constructive feedback. It’s also a chance to set new goals that drive performance and build A-Players.



    Both managers and employees play a key function in these meetings. Both parties should leave the meeting with full buy-in on any improvements, changes, or increased responsibilities. Both should have a firm understanding of where an individual stands based on a formal, documented assessment.

    Performance reviews are vital to your employees’ growth and development. Knowing what they need to work on and where they excel keeps them engaged while ensuring their work quality always improves. The experience you give them during this process also matters quite a bit. Employees are more likely to feel disengaged if they didn’t receive the feedback needed or felt unappreciated. Disengagement often results in lower productivity and overall decreased performance.

    How do you structure a performance review?

    What is the goal of the performance review?

    Whether it’s assisting an employee in refining their goals, fixing poor habits, or creating a career plan, write down the ultimate objective of the review. The objective of the review will help determine how it should be structured.

    Ask employees to prepare for their review and do the same to ensure you make the most of the review. Before the formal appraisal, create an agenda to ensure you cover the main topics and discuss the employee’s next steps. That way, you leave the review knowing you didn’t forget anything. Your employee leaves feeling confident and set up for success.

    As a manager, constructive feedback is part of your job. 53% of employees said it’s the number one thing they want from their bosses — even ahead of extra compensation. 68% of employees receiving consistent feedback feel fulfilled in their jobs. It’s clear that feedback is a key driver of engagement and consequently, performance.

     



     

    Be sure you’re ready to offer up potential solutions if performance is lacking and needs improvement. Work with managers to brainstorm solutions for employees who are struggling or not meeting goals.

    Accurately represent employee performance since the last review. Take into account any goals that were set, individual projects, disruptions, big wins, and other personal circumstances. This means you have to have a reliable means of tracking issues, goals, employee-company alignment, manager feedback, and so much more.

    One of the biggest complaints among employees is that performance reviews are confined to their most recent work. Managers must evaluate the body of work that occurred in the months between their current appraisal and last review. This is particularly true in light of the pandemic. Many employees’ productivity and performance may have declined due to circumstances beyond their control.

     

    Performance review statistics

    From the Workers' POV

    • Peer feedback improves the utility of performance management systems by 3.5% and increases performance by 14%.

    • Performance reviews are largely conducted by managers, and 70% of companies use self-assessments. However, only 17% of companies ask for peer evaluations.

    • 96% of employees want more frequent feedback from their managers.

    • 37% of employees say recognition from their managers is the most important type of support they can receive. 

    • When Deloitte US switched to more frequent check-ins with managers (at least every other week), employee engagement increased by 10%.

     



    From the Companies' POV

     

    What to ask during a performance review

    What do you want to learn during performance reviews, and what do you want employees to learn?

    Start with your employees. If you’ve had your employees fill out a self-evaluation, you already have some information to guide the review. Talk to them about their self-appraisal and ask where they see progress, success, or struggle. Get a feel for how employees see their own performance before launching into manager and peer review notes.

    Get peer feedback. Peer reviews give employees a chance to provide praise to their peers, and 89% of HR leaders say that continuous peer feedback and check-ins lead to success. It also gives employees a chance to get valuable feedback from those they work with on a day-to-day basis. Peer feedback can be especially useful in a remote environment where employees may have less direct interaction with their managers. Gathering feedback from a variety of coworkers can reduce bias that may come from one individual (the manager) evaluating another individual (the employee).

    Go back farther. When discussing their overall view of their performance, ask for specifics, and encourage them to think back to the previous review. Performance reviews suffer from something called “recency bias,” and it doesn't only impact the reviewer. An employee's answer about their proudest moment could be different from what it was six months ago. Help them remember all they’ve done over the time since their last performance review. Use your performance review software to access past reviews.

    Frame constructive criticism within company values and goals. This allows for a slight separation between the criticism and the person’s performance. It offers up a yardstick applied to all employees and gives the employee a north star in terms of alignment. Help create a plan for moving forward and improving after offering constructive feedback.

     

     

    Search for meaning. Employees who are engaged can see how their work relates to overall company goals. Ask your employees if they are finding meaning in their work. If they can’t see the meaning in their role, work with managers to ensure their projects align with the company’s mission and vision and can be directly related to the company goals.

    Focus on the behavior, not the person. When managers deliver feedback focused on improvement, it needs to be seen as actionable and supported by facts. Feedback should always be about the behavior, not the employee or their intentions.

    For instance, an effective approach for managers to address an employee’s behavior can go as follows: “I’ve noticed that you’ve arrived late to our weekly meetings four times this month. Is there a conflict in your schedule we can resolve?” An ineffective way of addressing employee behavior would be a statement like, “Your late arrival to the team meeting is inconsiderate.” Valuable feedback focuses on the problem directly and looks for solutions without making character judgments.

    CC-EE-Pillar-10

     

    How do I train managers in performance reviews?

    Training managers to give great feedback can make the evaluation process more accurate and fair, since managers work closely with their employee(s) every day. However, managers can’t conduct great reviews just because they know the reviewee well. Here’s how you can give managers the training they need to create a fantastic performance culture.

    • Managers should send and review self-appraisals before scheduling or conducting the performance review. Self-evaluations can provide a framework for the review and help the manager build an agenda. They also indicate to employees that review time is approaching. This gives the manager and the employee being reviewed time to prepare.

    • Teach managers to establish early in the review that it is a two-way conversation. Your managers should be talking and listening in addition to reviewing self-assessments to understand employees’ perspectives.

    • Teach your manager to focus on any gaps or inconsistencies among company values, self-appraisals, and how peers rated their performance.

     

    • Educate managers about potential biases and coach them on providing feedback based on behaviors and results instead of personality traits.

    • Emphasize the importance of being specific. Managers often try to couch their feedback in vague statements, hoping to spare employees’ feelings. However, employees need to hear specifically where they are excelling and where they’re struggling as well.

    • Ensure that managers stay consistent with their performance reviews and other feedback meetings. Every employee being evaluated should know precisely when reviews are happening and when to expect feedback.

    • Remind your managers that performance reviews are not personal: “We do not evaluate people, we evaluate results.”

     

    3 crucial tasks to complete before employee reviews

    There are a few crucial tasks to complete before your employee review meeting:

    1. Review employees’ previous performance documents. Doing this gives you benchmarks against which you can compare their progress. Read their past self-evaluations and performance plan documents. Determine whether or not they met their goals and evaluate their overall contribution to achieving your business’s goals. Take note of any areas of struggle or standout achievements.
    2. Determine new goals and objectives. Once you have reviewed their previous performance records, you can come up with goals and objectives for the next review. This conversation’s framework should revolve around what they can do to make your business more successful using their core competencies. It can also include skills that need improvement and new skills the employee wants to develop.
    3. Create an agenda and rehearse. In your agenda, include any follow-up comments relating to their previous review meetings. Discuss the goals you’ve just created and leave time for them to reflect on their progress and address concerns. Provide a list of action items. Rehearsing may sound weird. But, it’s an effective way to prepare yourself for the conversation and avoid any hesitation during the meeting.
     

    Preparing for performance conversations shows that the employee’s success and development are important. Completing these tasks will help managers and employees feel empowered and motivated by performance reviews, instead of stressed or frustrated.

    Performance Review Tip:

    Coach your managers (and remind yourself) that performance reviews are important to your employees. They want to feel valued and have their contributions recognized. They also want to improve performance and learn new skills. Help managers avoid performance review burnout by spacing out conversations and allowing for some downtime in between.

     

    How to conduct a performance review remotely

    Now that remote and hybrid workplaces are here to stay, conducting a remote performance review is a necessary skill. Your company may have made other permanent changes to the performance review process, like a shorter review cycle or a new method of scoring performance. Communicate any changes to your performance review process, especially if there were significant changes or your workplace became fully remote.

    There is a difference between in-person and remote evaluations. Remote reviews mean that managers need to be more intentional about following up on their feedback. Performance review standards may have also changed during the pandemic. While many companies have successfully handled remote work and performance management, it’s a brand new experience for others.

    With that in mind, conducting a remote performance review cycle is possible. Here’s how:

    CC-Perf-Rev-12

     

    • Communication is key. Your communication with your employees should start well before the reviews. Let your employees know exactly what to expect from the technology you’ll be using and tips on troubleshooting any issues to the length of time the review will take. Consider some or all of the following variables to communicate to your workforce:

      • Type of review taking place

      • Agenda for the review

      • Self-evaluations

      • Company mission, vision, values, and/or goals to review

      • Notes or documentation from the last review to have handy

      • Whether the review will be audio or include video

      • When to log on (you don’t want employees overlapping one another)

      • If they need to prepare questions for you/their manager

      • How or if you will be using different metrics during this time

    • Be transparent. If there were major changes to how performance is handled at your company, clearly communicate the new process or expectations. Train your managers to be as open and honest with employees as possible. Help employees understand company goals and objectives. Give them a clear line of sight into what’s going on in other departments. That creates additional empathy and clarity in the workplace.



    • Be specific. When on video, context cues are a little harder to pick up on. Do NOT be vague. Now is the time to be explicit with praise, specific with constructive feedback, and offer solutions to your employees. When setting new goals, discuss specific expectations and timelines.

    • Document everything. A great performance review process is only as good as the performance management software that supports it. Ensure all your employees have access to their performance reviews and the career plans or goals that came from them.

    • Plan for interruptions and technical difficulties. With so many using remote conferencing technology, an alternate time, a second line or tech option, and being flexible are all important. Your employees may be dealing with homeschooling, a partner or spouse working at the same time, dogs barking...the list goes on. Perhaps you and your managers are also dealing with these things. Setting the stage for handling interruptions makes them seem like less of a disaster if and when they happen.

    100StarterPhrases_Mockup-1

    100 Starter Phrases to Align Employee Performance & Goals

    Kick off more productive conversations with these 100 helpful phrases.

    Download resource

    Performance review conversation starters

    No two performance reviews are the same. After all, every employee has different goals, and their performance reviews should be as customized as possible. However, these conversation starters can help you and your employees begin those performance discussions.

    Here, we’ll share ways to phrase compliments to convey how the employee created a better work environment with their performance successes. We’ll also share some conversation starters employees can use to reflect on their performance and ask for feedback.

    Results and key accomplishments
    You impressed leadership and exceeded expectations with [accomplishment/achievement/project] which impacted the company in the following ways...

    Your project was completed ahead of the deadline. This impressed the [client/manager/your coworkers] and helped the company meet its goal of [company goal].

    Your work on the ____________ allowed your coworkers/colleagues/team members to ___________.

    You completed ___________ by ____________ resulting in [number/percent/key metric] for the company.

    Tying values to performance
    You exemplified[company value] when you did ___________. 

    Your performance on the ____________ project showed[company value] in action. 

    You’ve been a key contributor to our success and culture by showing others how[company value] is done in real life. 

    You regularly do/exhibit [BEHAVIOR, which is in total alignment with our [company value]. 

    Bottom-line goals
    The project you led contributed significantly to the team/department/company goal of ____________.

    You made a huge impact on the bottom line by taking the initiative to do ___________ when you were only assigned _________.

    Your work on [project] helped us reach [company goal] on time/ahead of schedule. 

    Individual Strengths
    On this team, you are well known for doing ___________, and this has made the team better at _________.

    It’s clear you’ve been working hard on ___________ and it’s made a noticeable difference in achieving/completing [company goal/project]

    Teamwork and Collaboration
    Your handling of [specific situation] between [client/coworker/leader/vendor] and client/coworker/leader/vendor really helped move [project] along. Thank you. 

    Your willingness to sacrifice ____________ so your team/coworker/boss could take on __________ made a huge difference on the team.

    I’ve noticed you do _____________ lately to assist ___________. That is particularly helpful right now.

    Looking for even more performance review prompts? One of our most popular resources offers over 100 Starter Phrases to align employee performance and goals so you can give better feedback. Download 100 Starter Phrases now.

    Upgrade your performance management system

    Request a demo
    CC-perform-review-CTA