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Performance Review Best Practices: 7 Tips for Conducting Meaningful Employee Appraisals

Performance Review Best Practices: 7 Tips for Conducting Meaningful Employee Appraisals

The employee performance review has been a standard business practice for decades. However, not all organizations recognize that there’s a fine line between a valuable performance review and an unhelpful one. 

When done well, performance reviews are an incredibly powerful tool for driving employee success. When done poorly, they simply waste time and leave employees frustrated. The downsides of bad performance reviews have led some companies to shift away from performance reviews in recent years. However, it’s better to solve these issues than avoid them altogether.

There is immense value to developing an open, honest avenue for managers to discuss an employee’s performance and opportunities for growth. Let’s break down what your business can do to create positive appraisal experiences that drive your employees to succeed.

A small business owner conducting an employee performance review with appropriate best practices. 

The True Goals of Employee Performance Reviews

Simply put, employee performance reviews are conversations where a manager and an employee openly discuss that employee’s performance, development, and growth. This conversation is a key way to identify ways for both personal and company improvement. The word “conversation” is critical here – these appraisals should be a two-way conversation. 

The reason why it’s important to have a conversation is that the employee should be just as engaged as the manager. Employee performance reviews are not designed for immediate fixes. If there’s a problem that requires immediate resolution, you shouldn’t wait for an appraisal. 

Instead, performance reviews are meant to create regular opportunities for managers and employees to align their efforts and determine how they can maximize performance. As such, performance reviews give you an opportunity to work with your employees and achieve the following goals.

  • Create and review expectations, standards, and rules.
  • Educate employees about any behaviors they need improvement or modification.
  • Identify any strengths and weaknesses that weren’t already known.
  • Chart a course for the employee’s future.
  • Learn more about the employee.
  • Send a message that you care about the employee, both personally and professionally.

7 Performance Review Tips for Managers

By focusing on the appropriate goals, your performance reviews can help motivate team members and improve performance levels. However, those ideal goals will only go so far without proper execution.

It’s essential to make the employee performance review process as positive of an experience as possible. The following tips can help you learn how to conduct performance reviews and build a culture of continuous improvement for your employees.

Prepare ahead of time

The first step toward any successful employee appraisal is preparation. Both you and your employees should come prepared to performance reviews with notes and talking points. The following items and information can also help.

  • A copy of the employee’s personnel file.
  • Documentation from past reviews, including previously set goals, objectives, and notes of interest from prior conversations.
  • Feedback and notes from supervisors or coworkers.
  • Relevant performance data and customer feedback.
  • SWOT analysis.

A shared agenda will also help set a positive, constructive tone for the meeting. Some employees will go into a review expecting an interrogation that will directly impact their future compensation. Giving them an agenda and questions to think about will help them be in a mindset for growth instead of being tightlipped and careful about the information they share. 

You can also prepare by asking employees up for review to share any topics they want to discuss. This gesture not only allows the employee to change the agenda to be more valuable for them, but also shows that you’re ready to listen. That two-way connection will encourage employees to contribute more to the review and own their path for professional improvement.

Speak carefully and ask the right questions

Your choice of words make a big difference. The right words and tone can help motivate your employees. Meanwhile, less friendly phrases will only make them dread these occasions in the future. 

In terms of your message, try to focus on specific language that makes employees think in positive terms. For example, emphasize that the goal of each review is to solve problems and identify ways to help both the employee and the company grow. This constructive approach can keep employees engaged and look forward to the future. 

The questions you ask are a major part of this process as well. These queries should mirror the same positive approach. The following questions are great ways to emphasize the future and and create steps for improvement.

  • What goals do you have for the next quarter, year, or other period of time?
  • What accomplishments are you most proud of from your work?
  • What goals do you want to set for your own development?
  • Are there any hurdles that we need to solve together?
  • What can I do to improve as your manager?

Listen as much as you speak

Even if you know that performance reviews should be a two-way conversation, it can be easy to end up talking most of the review. A two-way conversation should never feel like an interrogation or like only one party is talking. Employees may be hesitant to share too much information out of fear of saying something wrong. 

It’s important to make sure that everyone being reviewed not only feels comfortable enough to share genuine thoughts, but also know that you’re actively interested in what they’re saying. Make sure to ask them about topics where they can lead the conversation. When an employee has interesting feedback, ask a follow up question to delve into the topic even further. You should also repeat back what you heard from them to confirm that you listened to their points and can clarify if there’s any misunderstanding. These practices will help you gather more critical information and show employees that the reviews are an ongoing conversation and not a one-sided affair.

Give specific examples for both good work and areas of improvement

Vague or generic criticism doled out during performance appraisals is only going to frustrate and disenchant employees. The best way to provide genuine critical feedback is to have concrete examples for good achievements and areas of improvement.

One major benefit of using specific examples is that they provide very clear examples of exemplary or subpar work. Exact examples provide teachable moments of what can be done to improve that provide more weight than general feedback. 

Examples also have the benefit of showing that you and your management team are paying attention. Whether you’re identifying ways for the employee to improve or providing accolades for good work, it shows the employee that his or her work hasn’t gone unnoticed. That level of attention gives your feedback more weight and helps your workers feel like they aren’t invisible.

Track employee progress

In order to maximize the benefit of performance meetings, it’s essential to track that your efforts make a difference. You should do your best to find measurable goals and evaluate your employees’ progress over time. When you review these goals, try to answer the following questions

  • Do you see positive progression for measurable goals?
  • Has employee performance improved, declined, or stayed steady?
  • Has employee morale increased, decreased, or stayed steady?
  • Is the employee more confident than they were in past reviews?

Over time, you should see employees continue to grow in their roles. If you’re not seeing positive results, you may want to change the goals or try a different approach toward maintaining professional growth. 

Have next steps for after the meeting

The performance review is just one step in a long process. Once the appraisal concludes, you and your employee should review everything that was discussed and complete the following:

  • Review notes from what was discussed during the meeting
  • Determine and define next steps 

A performance conversation shouldn’t end when the meeting is over. After the conversation concludes, managers and employees should review notes, define next steps, and follow up with shared comments and feedback. Without these items, performance conversations feel unresolved. If you want your review to actually improve performance, it’s vital to create an action plan and follow through on that plan.

Make performance reviews a regular exercise

The conversation between management and employees doesn’t need to be an infrequent occasion. Performance conversations should be a regular event to help encourage improvement. Why wait another 12 months to try and focus on growth when regular feedback can help improve your company even sooner?

Once you finish a performance review, try and schedule the next conversation as soon as possible. The cadence of these meetings will differ depending on your organization, but quarterly or monthly appraisals are good places to start. These regular meetings will not only keep the conversation going, but also show your employees that you care about their development.

It’s also important to note that conversations shouldn’t be limited to just performance reviews. Constructive discussions can happen outside of scheduled appraisals. An open-door policy can help employees feel more comfortable talking about potential issues or paths to improvement at other times. This level of openness can help you make continuous performance a part of your culture instead of an unhelpful annual event.

Set Up Your Employees for Success

Your employees are your greatest asset. However, ongoing employee management is a major challenge, especially when there’s only so much time in the day. That’s why GMS works with businesses to help employers with everything from performance management to payroll administration.

As a PEO, we help small businesses take control of critical HR management functions so that they can spend their time on other key business tasks. Contact GMS today about how we can save you time, money, and plenty of headaches by helping you take control of critical HR functions.



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