How to Conduct an Effective Performance Review

A proper performance review can be a very useful tool for both managers and employees. Ideally, a performance review should help drive employee development, it should establish clear expectations, and help motivate employees. While the idea of a review can create anxiety for both a manager and employee, it doesn’t need to be that way. By planning for a review, a manager can help to defuse any tension and get the most out of the experience. While there is no one way to conduct a performance review, managers should consider the following when preparing.

Determine Who will Evaluate the Employee

The first step to planning any performance review is determining who will provide an evaluation of an employee’s performance. One increasingly popular method is the 360-degree performance appraisal, which solicits feedback from the employee, co-workers, and even customers. Essentially the 360-degree performance appraisal is a look at the employee from all angles. While it can be very time-consuming, it allows for a broader view of the employee’s performance and provides more data. This method of evaluation can be particularly useful if a manager is in the same physical office as an employee; however, there are some drawbacks to this approach. Managers need to be realistic and understand that office politics and other factors may skew the reviews of co-workers, and ultimately each reviewers evaluation must be taken with a grain of salt.

At the very least a performance review must elicit an assessment from the manager and the employee. Be sure to collect an employee’s evaluation before a review, and make the evaluation a dialogue where the employee is free to discuss their assessment and provide feedback. Ultimately, the more employees are involved in a review, the more they will buy into the process, and the more useful the review will be.

Have A Road Map

The most important thing is to be prepared for a review. Anticipate what an employee might say, how you’d like the review to go, and how to get there. Have a plan, and follow these golden rules when designing your performance review roadmap:

  1. Determine what you want to achieve by the end of the review. Before you go into a review, determine what you want to achieve. Reflect on an employee’s performance over the entire year. Perhaps several areas of the employees performance need improvement, and you hope to use the review to propose an action plan. Whatever your objectives are, determine what you’d like to achieve during the review before you start.
  2. Let the employee speak first and only interrupt them for clarification. It is important to make the employee feel that this is a dialogue and that their opinion matters. Don’t interrupt when the employee is speaking. By letting the employee speak without interruption they will feel more at ease, and they will be less defensive about any constructive criticism.
  3. Emphasize the positives, as well as areas that need improvement. People respond better to praise than criticism. Areas for improvement should be balanced with recognition, if possible. By emphasizing positive feedback, employees will be more likely to improve upon their strengths as well.
  4. Set goals that are measurable, for the next meeting. Think of the performance review as the kickoff to whichever goals you and the employee agree are necessary, between now and the next review.
  5. Discuss development and training with the employee. Once you know which goals you and the employee want to achieve before your next meeting, you’ll need to provide the tools to get there. Also, discuss a plan for the employees long-term career development.
  6. End on a positive note. Remember, after the review you’ll have to work together.

By going into a review with a plan of how you want to start, conduct, and end the review, your chances of a successful review improve measurably. Employees will always feel more at ease if their manager seems in control and relaxed.

Avoid Biases and Common Errors

To effectively perform a performance review, employers must avoid common rater errors that can sabotage a review. According to Wayne State University, a few of the common errors are:

  1. The halo effect: This is when a manager allows a single factor to influence everything. This occurs when an employee’s entire year is shaped by one good sale, one bad report, or any other “one-off” event.
  2. The recency effect: This is one of the most common rating errors for performance appraisals. The recency effect is the tendency of managers to shape an entire review based on what has happened very recently. Minor events that have happened recently outweigh major accomplishments that occurred earlier in the year.
  3. The Similar-to-me effect: The tendency of managers to rate people who are similar to themselves higher than others based on that similarity.
  4. Central tendency: Rating all employees near the middle of a scale, even though their performance clearly warrants a higher or lower ratings.

The Bottom Line

Ultimately, there is no one right way to conduct a performance review. But if you plan ahead, elicit feedback from a broad range of reviewers, and listen to the employees comments and concerns, you are ahead of the game. Ultimately, employees want to be heard and to feel important, so make your reviews a conversation about where the employee is today and discuss the areas that you both agree need growth. While there’s no guarantee an employee will receive the review well, by following the outline listed above you, the manager, will have done your part to make the review a success.

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