Annual Performance Reviews: The Easiest Conversation You Should Have

By Jimmy Kitson, Director, Sales Training & Development, Healthpoint Biotherapeutics

Each year in December, all managers receive an e-mail from their HR department titled, “Annual Performance Review Schedule.” The first lines of the document usually read, “It’s that time of year again…” Every manager 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 teammate, and as an employee of the organization. However, an annual performance review should be the easiestconversation a manager should have with their employee, if the manager has appropriately managed this process over a 12-month period.

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). A good manager must define these terms and define 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 reflects 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 managers also do not wait until the end of the year to review the competencies and scoring systems with their employees. Some managers 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 manager 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 manager writes 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 the manager has personally witnessed and not “rumors” or second-hand information.*
3. Facts about an employee’s performance (No Opinions).*

*If you hear 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 you follow these three simple guidelines to the comments you share with employees 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 employees 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 employees 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 theirgoal sheet with them during the annual review. I know many organizations are moving to online forms for goals. However, employees usually are more accountable after seeing goals in their own writing.
3. Set up 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 be on 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 manager. “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 misaligned work environment. Company morale and corporate culture are two of the main reasons 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 manager and the employee. Too many times, these reviews become one-way conversations with the manager 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 manager to not only share past performance, but also to set up an employee for success for the future. The tone and delivery a manager utilizes during these conversations can lead an average performer to become an exceptional employee. However, these meetings, if not handled appropriately, also can take an outstanding employee and de-motivate him or her to become average. Make sure your annual review process is a 12-month journey rather than a one-month crash course…your employees will appreciate the effort you take toward their development.

Jimmy Kitson is the director of Sales Training & Development at 2011 Training Top 125 winner Healthpoint Biotherapeutics.