At the end of each year, most leaders will receive an e-mail from their HR department titled “Annual Performance Review Schedule”.  The first lines of the document usually always read “It’s that time of year again…”.  Every leader then begins to think of the time they must spend during the final month of the year writing performance appraisals for each of their employees.  Hours are spent thinking back on an employee’s behavior over the last 12 months, and how they performed as an individual, as a team-mate, and as an employee of the organization.  An Annual Performance Review should be the easiest conversation a leader should have with their employee, if the leader has appropriately managed this process over a 12 month period.

*Some companies are moving away from an annual performance review process, which will be the subject of a future posting and something I totally support.  Discussing a person’s performance should be a regular conversation! 

Setting Expectations Early and Often

Most organizations follow a scoring method for annual reviews, whether you use numbers (1-5 with 5 being the highest) or terms (Below Expectations, Meets Expectations, Exceeds Expectations).  Each year, an effective leader must define what these terms mean and what performance looks like to earn a specific rating.  For instance, a “3 out of 5” might equal “Meets Expectations”, which is a good score and demonstrates that an employee is meeting the expectations of the company.  However, some employees will view a “3 out of 5” score as a “C” grade and think they are not performing at a satisfactory level.  Whatever your company’s criteria are, you must make sure these definitions are clear and consistent among all employees.

Effective leaders also do not wait until the end of the year to review the competencies and scoring systems with their employees.  Some leaders make a point of conducting monthly or quarterly job performance reviews with their employees, which are a scaled down version of the annual performance review.  This “Scorecard” approach will lend itself well to the final Annual Performance Review.  Additionally, this approach works well with employees who are struggling with their current job responsibilities.  Sometimes, a leader will avoid having difficult conversations with their direct reports, but by conducting these mini performance reviews throughout the year, these conversations become natural and expected.

No Surprises

If you have been an effective leader to your employees throughout the year, there should not be any surprises or difficult discussions when it comes to delivering the annual performance review to an employee.  The comments a leader shares in any review should consist only of:

1. Topics that have been specifically discussed with the employee throughout the year and/or documented in the communications to the employee
2. Items that the leader has personally witnessed and not “rumors” or second –hand information *
3. Facts about an employee’s performance (No Opinions) *

*If there are rumors you hear about an employee’s performance or if you wish to share your opinion with an employee about a certain area of concern (supported by specific facts), an annual performance review is not the time to have these conversations.  Address these topics immediately and do not let them become a distraction throughout the year.

If leaders follow these 3 simple guidelines to the comments you share with an employee during their annual review, the conversation should lead to a mutual agreement on both past performance and future expectations.

Ideas on How to Plan for the Easiest Conversation You Should Have

1. Talk with your employee at the beginning of the year and review the annual performance process with them. Discuss the competencies they will be rated on, the scoring system (with definitions) your organization uses, and what your expectations are.
2. Have your employee write down their goals for the year on a sheet of paper and make two copies, one for the manager and one for the employee. Then, share their goal sheet with them during the annual review.  I know many organizations are moving to online forms for goals.  However, an employee is usually more accountable when they see their goals in their own hand-writing.
3. Setup appointment times with your employees throughout the year to discuss their performance. Use a scaled down version of your annual performance form and rate them on the time period you agree to.  For instance, if you choose to discuss this process on a quarterly basis, your conversation in April should relate to their performance from January to March.
4. Never use the word “I” in evaluating any person’s performance. It should be understood that the scoring comes from the leader.   “I think you could improve your overall communication” could be re-phrased to “Improved communication with your peers will help lead to more sustained performance”.
5. Employee goals and areas of development should be aligned to business objectives. If an employee has a goal that does not lead to improved company performance or increased productivity, then you risk creating a mis-aligned work environment. Company Morale and Corporate Culture are two of the main reasons why an employee will stay or leave an organization, and tying employee’s goals with company objectives can lead to keeping your best employees engaged.
6. These review sessions should be a conversation between the leader and the employee. Too many times, these reviews become one-way conversations with the leader doing all of the talking and the employee doing the listening. Give the employee a task before each meeting (Self-Review, ideas to improve performance, personal goals, etc…) and have them start off the meeting with these topics.

Annual Reviews are conversations for the leader to not only share past performance, but to setup an employee for future success.  The tone and delivery that a leader utilizes during these conversations can lead an average performer to become an exceptional employee.  However, if not handled appropriately, these meetings can take an outstanding employee and de-motivate them, resulting in reduced employee engagement.   Make sure your annual review process is a twelve month journey versus a one month crash course…your employees will appreciate the effort you take towards their development.