5 Best Practices for Effective Employee Performance Reviews

As the end of the financial year approaches, there’s a phrase that starts to be used by managers that often strikes terror into the heart of employees everywhere.

“It’s time for your annual employee performance review.”

Annual employee performance reviews form an essential part of examining and assessing an employee’s performance. The CIPD, one of the leading professional membership bodies for the Human Resources field, says that performance reviews are used to gather information ‘to inform administrative decisions (such as on pay, bonuses, promotions or redundancy.’ and to also help guide the skills development of employees.

Getting the process right can be tricky though.

Research suggests that employees, understandably, are sceptical of the benefit of employee performance reviews when it comes to motivating them to improve performance. Many report the exact opposite – employee performance reviews can actually demotivate people.

It’s clear that finding the right balance. We explore some of the best practices to use when it comes to holding effective employee performance reviews. We’ll cover everything from preparation to body language. Read on to find out more.

1. Prepare in advance

For an employee performance review to be more than just a rubber-stamping exercise you’ll need to do a fair amount of work in advance. The same goes for your employee. Both sides will have to put in some work ahead of the review to make sure that the opportunity doesn’t just devolve into a bureaucratic box-ticking procedure.

For the manager, this means thinking carefully about the employee’s performance over the past year and preparing some level of feedback based on this, ahead of time. Of course, the exact form that this feedback will take depends on the specific format of employee performance reviews at your organisation.

A lot of the paper-based tasks associated with a performance review can actually be completed in advance of the meeting itself. Here are some of the obvious things that you’ll need to prepare ahead of the review:

Read previous performance reviews relating to the employee to gain a better understanding of their performance to date and the general context your performance review sits in. Prepare your own thoughts.
Think about your employee’s performance to date since their last performance review and see if their performance aligns with their previous targets.
Ask your employee to assess their performance over the last year and think about their achievements, using previous employee performance reviews to guide their analysis.
Ask your employee to think about whether or not they have achieved the targets (if any) that they set during their previous performance review and come with some thoughts.
Ask your employee to think about new performance targets that they would like to work towards over the coming year.

Whilst preparing for an employee performance review can feel particularly demanding whilst you’re doing it, it’s definitely worth it in the long run, helping to take some of the pressure off you and your employee in the actual review itself.

A woman and a man having an appraisal

2. Make it a conversation

Employee performance reviews can often end up feeling like an interrogation if you’re an employee – a bit like you’ve been put on trial and you’re having to justify your behaviour. When performance reviews leave this type of impression, they’ve been carried out poorly. A performance review should be a conversation about how an employee can fulfil their potential – not a confrontational dressing-down.

Ultimately, best practice when it comes to employee performance reviews is to make them a conversation – an event where both sides have an equal input into what is discussed and how it’s discussed. Of course, as a manager, you’ll have your own intentions for what you need to get out of the meeting and how it needs to play out. The key however is to try and blend your own needs with that of your employee.

There’s an obvious power imbalance in situations like this that can put employees on edge, so you can improve employee interaction with the process by trying to level the playing field in the meeting itself. Here are a few ways that you can make your employee performance review a conversation:

Try to use active listening techniques (this blog by VeryWellMind goes into specific methods you can use in great detail)
Agree on a running order for the meeting with your employee, rather than imposing one, and get their input to help them feel a degree of control over the process
Invite feedback from your employee and their opinion throughout the meeting. Ensure that you’ll both talking for a roughly equal amount of time

3. Take clear, detailed notes

We’ve all been in a situation, like a meeting or a training, where you need to take notes fast. You can get so focused on capturing every single word that has been said that you end up with a sheet of paper that’s covered in incomprehensible scrawls. Taking notes well is an art. That said, it’s also a science that can be learned with some practice!

Ultimately, taking clear and detailed notes relies on you finding the method of note-taking that works best for you. Ask yourself a few questions about how you learn information to begin with. What helps you order your thoughts? What type of stimuli do you respond well to? Do you seem to remember more information when you write in full sentences and paragraphs, or when you link words and concepts together? When you’ve worked out how you learn and process information, you can find a note-taking system that works with you.

There are a whole range of different formats and systems out there when it comes to taking notes and we obviously don’t have enough space to go into them in detail here. The most popular ways include things like:

Summarising information
Mindmaps and diagrams
Colour coding

The Open University has a great free resource that explores the topic in really comprehensive detail and it’s worth a read if you’re curious about different techniques you could use. You’ll usually find that you’re drawn towards recording information in a particular way. Experiment and see which method works best for you.

Two woman having an appraisal smiling

4. Find the right environment

We often underestimate the effect that our immediate surroundings can have on our mental health and thus, how we approach a particular situation. Employee performance reviews can be particularly nerve-wracking events – for both employees and managers. A good rule of thumb to take some of the anxiety and awkwardness out of the situation is to make sure to find an appropriate place to hold your employee performance review.

Research has shown that office design can have a big impact on mental health in the workplace as this great blog by the Australian and New Zealand Mental Health Association explores. This has big implications when it comes to hosting a good performance review. For example, imagine holding a performance review in the middle of a busy office floor or in a staff restaurant or break room. Whilst, it might have an informal feel, the environment is noisy, distracting and full of people who can listen to every word that you and your employee say. As a result, neither of you will really feel comfortable exploring confidential matters relating to performance and you’ll probably find it hard to concentrate too.

Ultimately, you want the experience to be as relaxed as it possibly can be so that both sides can contribute honestly and from the heart but also be relatively formal so that professionalism and confidentiality are maintained.

Your options might be limited by the design of your office but the best bet is to try and find a meeting room that has plenty of natural light, is a comfortable temperature and that is relatively quiet. This type of environment will help support conversations, rather than working against them.

5. Pay attention to your body language

In the eyes of an employee, performance reviews are often seen as an assessment – a scrutinisation of their actions at work – rather than a conversation.

As a result, employees will be watching you closely for any possible indication they can gather about your true feelings on their performance. Particularly if a promotion, raise or heaven forbid, even a job, is at stake. In situations like these, every action you can take to reduce the amount of stress in the room can be worth it when it comes to running a successful employee performance review. That’s where your body language comes in.

Body language is a type of nonverbal communication. It’s the name given to the variety of different ways that we use our body to communicate particular things – from smiling and laughing to indicate happiness and amusement, through to raising our eyebrows to indicate surprise.

There are a myriad of different ways that we use our body to communicate with others – sometimes, without us even realising what we’re doing.

When you’re carrying out your performance review, the best practice is to adopt a friendly, open body language. That means trying to use gestures and expressions that suggests a feeling of ease, positivity or openness. You want to encourage your employee to feel comfortable and that means using language that would suggest you yourself are comfortable too! Generally this will mean:

Adopting a neutral, relaxed expression on your face
Keeping your arms relaxed and not crossed
Making sure that you don’t raise your voice

This article by Indeed explores body language in a work context and how it can influence meaning, and this blog post by HelpGuide.org covers the different types of body language you can use and the meanings behind them.

Make your employee performance reviews more effective with these tips!

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