Performance reviews are considered awkward by employees and employers alike. Employees do not want to sit through 2-3 hours of annual review meetings with one-way feedback from the employer.  Managers usually dread these yearly performance review meetings will strain the employee-manager relationship.

The reality is performance review is an integral part of each organization, irrespective of the business size. A small organization with a handful of employees has the founder take charge of the employee performance reviews. In contrast, medium to large-sized corporations has a dedicated HR team.

According to research by CEB, 9 out of 10 managers are dissatisfied with how organizations conduct performance reviews; on the other hand, 90% of HR leaders believe that the traditional review systems do not generate accurate information.

With the work ecosystem evolving fast, the performance appraisal process has gone through a massive shift. So, here are tips on how to structure performance reviews effectively.

What is an employee performance review?

An employee performance review is a system to measure and analyze an individual's performance over time. It is usually guided by a pre-defined set of parameters on which the performance of an individual is judged.

What to include in a performance review?

Knowing what to include in a performance review system will help you design an effective process for meeting organizational goals.  Here are some key elements that can be included in a performance review:

1. Set expectations

Having the right goals set from the very beginning is essential. Knowing what they will be judged on will help employees to align their efforts accordingly.

2. Increase the frequency of reviews

In today's day and age, monthly or quarterly performance reviews are essential to staying in touch with the changing realities of your employees. Frequent performance reviews help drive employee efforts through timely and relevant feedback.

3. Make reviews transparent

Performance reviews drive anxiety among employees as they don't know what to expect. Hence, to make this effort collaborative, invite them to participate in the agenda-setting exercise.

4. Make it objective

Not providing feedback is better than passing vague and unclear statements. Even if you want to sugarcoat their shortcomings by not being clear, you are not doing them favors. The feedback should ideally be backed by data and be objective in its approach.

The structure of a productive performance review

The structure of a productive performance review process broadly includes the following three steps:

1. Goal-setting

Goal-setting usually happens at the beginning of the review period. Managers and employees are expected to work towards setting the employees' goals jointly.

2. Follow-up

After the goals are set, the manager and employee can meet regularly to discuss the employee's performance. Rather than keeping it at the end of the period, it is better to have regular checks and balances to see if the employee is on the right track.

3. Performance conversation

The last step in the process is the conversation at the end of the review period. It can be in the form of written communication from the manager to the employee. Such communication helps determine the employee's performance and set the goals for the next period.

How to prepare for a performance review

It is essential to go into a performance review with adequate preparation. Here are some steps that can help you prepare for a performance review effectively:

1. Prepare well in advance

Preparing the report one hour from the meeting and writing it in a hurry is not ideal. You must have your observations and questions ready well before the meeting.

2. Share a feedback report in advance

It is better to share a feedback report on the employee at least one hour before the review meeting. It will prepare the employees on what to expect. Additionally, an advance report will help them come up with concrete responses.

3. Focus on the future

The employee's performance must be judged from the perspective of the future. You must try and aim to maintain a balance between past and future employee discussions.

4. Make it a two-way conversation

It is essential that the performance review meeting is made a two-way conversation between the manager and the employee. You are on the right track if the employee does most of the talking.

How to conduct a performance review

Here are the steps that you can follow for an effective performance review:

1. Lay the groundwork

It is a good practice to set proper groundwork before sitting face-to-face with the employee. You can also refer to your notes about the employee, which will refresh the memory and act as the raw material for preparing the report.

2. Set a tone

Set the right tone for the meeting. A usual performance review meeting has three components: compliments, criticism and some niceties. The problem with this approach is that it discourages your good performers and doesn't help the struggling employees either. Instead, it is better to be transparent and objective.

3. Coach constructively

The manager should adopt the role of a constructive coach in the review season and beyond. For instance, you can tell the employee to work on some aspects, stop some activities and continue with a few that are working fine.

4. Hold your ground

Share your views on the rating received by the employee. For instance, most organizations follow a rating scale of 1-5 for the employees. Now, employees near the three mark might consider the rating average. Make them understand that the rating system here differs from schools where C was mediocre. In a corporate setting, you are dealing with a select group of employees; thus, 3 is a good rating.

How to follow-up after a performance review

Keeping a follow-up schedule for a performance review is the most crucial part. Most companies miss this and struggle with improving their performance review system. Here are some steps to help you schedule a follow-up after the performance review:

1. Set a schedule

It is a good idea to set a schedule for the follow-up meetings in the performance review process.

2. Be approachable

It would help if you made yourself approachable to your employees so they can discuss issues without feeling conscious.

3. Keep notes ready

During follow-up sessions, be ready with notes for on-the-spot coaching.

4. Compare progress

The manager and employee need to compare progress in the follow-up meetings. Again, the feedback should be specific and objective rather than vague and general.

Performance review sample phrases and comments

There are no set phrases you can limit yourself to while providing feedback in the performance review meetings. The focus should be on meeting organizational goals and leaving employees feeling fair and transparent about the process. Here are some performance review sample phrases and comments that you can use:

1.       Shows strong work ethic and character at work.

2.       Applies creative thinking in the allocated tasks to achieve the result

3.       Can be considered a reliable resource for future projects.

4.       Flexible in meeting the organization's needs.

5.       Responds well to change in various situations.

6.       Strong communicator among colleagues, partners and customers.

7.       Takes ownership for the success and failures of tasks in the organization.

8.       Admits mistakes and informs in advance if the deadline can’t be met.

9.       Follows the attendance policy and has a good record.

10.   Positively contributes to the performance of the organization.

A performance management software can help

It requires effort and commitment to design and execute an effective performance review system. Why not make your review process more efficient with performance management software?

Mesh is among the most popular performance management software that can help drive growth by providing consistent feedback to employees. It creates a performance review system that provides employees with real-time feedback. Lastly, the software understands the individual strengths of each employee and drives self-improvement.

‍