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Performance Management

How to Set a Foundation for Effective Performance Appraisals

November 20, 2016
5 min read
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Performance Management, Supercharged


Whether they happen once a year or once a month, performance reviews are an essential part of any business. If you want to build a performance culture, how you conduct performance reviews can make or break your business. If you want your reviews to have positive results, you have to lay the groundwork. Good performance reviews don’t just happen. They take work and preparation, and you have to set a foundation. Start working on this prep work now to ensure great reviews down the road.

Document Everything

When you get into a performance review, the last thing you want to remember is everything your employee did over the last year. It’s not going to work. Instead, keep track of both positive and negative accomplishments throughout the year. Make sure what you write down is as objective as possible, and note specific examples. When asked, 42% of professionals said they feel managers leave important elements out of their review due to bias.


42% of professionals said they feel managers leave important elements out of their review due to bias. 


Don’t just rely on your own judgment, either. Use supporting data, like 360-degree feedback, to get their fellow employees’ perspectives. Ideally, 40% of the performance review should come from the manager, 30% should come from the employee, and 30% should come from the employee’s peers.

Tip: In order to decide what examples you’d like to note in the review, think about what you want the employee to take away from it. Decide on three things the employee has done exceptionally well since the last to go over.

Communicate the Little Things

No employee should hear about their achievements or shortcomings for the first time in a formal review, especially if you’re only doing them annually. Give your employees small feedback frequently to avoid feedback gaps. It’s not just going to help your reviews: When a company implements regular feedback, they have turnover rates 14.9% lower than when employees received no feedback.

CC-Click-ToTweetBird-01.png Giving employees small feedback isn't only helpful to the review process, read this about #turnover rates:


Your recognition should be simple, concise, and matter-of-fact. Save the in-depth discussions for the review. Saying “good job,” or “you’ve been late twice this week, I expect everyone in at 8:00 a.m.,” is enough to let the employee know you’re paying attention.

Tip: A company-wide intranet system is a great way to provide frequent feedback. You can comment on things you’re proud of or are problematic without interrupting your worker’s schedule.

Establish Clear, Measurable Goals

Did you know more than 80% of small business owners don’t keep track of business goals? Goal-setting is an essential tool: it forces you to be specific and set concrete, measurable objectives. However, just setting a goal isn’t enough;  Only about half of employees know what’s expected of them, and even worse, many managers don’t know either!

Make it clear how the employee will be evaluated, and how they can achieve the goals. Don’t leave them swinging in the wind, come up with a plan to improve that the employee can stick to.

Tip: Don’t shoot too high. Being ambitious is great, but you don’t want to be setting your employees up to fail. Need a refresher on seeing great goals? Find one here.

Go in with a positive attitude

Even if your employee’s performance has suffered since the last review, approach the review looking to help your employee improve. The positive attitude you convey in a review can majorly impact how the next one goes. When you and your employees are happy and positive, it results in an “upward spiral”. The employee wants to learn new skills, so they become more successful, so they are happier, and on and on.

You don’t want to lecture your employees. Criticism is vital to improvement, but droning on about transgressions isn’t going to help anyone. You want your employees to be motivated and excited about opportunities to grow. When asked, 52% of millennials said opportunities for career progression are the most desirable quality in a workplace.

CC-Click-ToTweetBird-01.png You don't want to lecture your employees. Read this to improve your motivational skills: 

Tip: If the review didn’t go so well, make sure you close on a note of support. Express confidence in your employee’s ability to grow and overcome challenges.

Employees and managers alike rarely look forward to performance reviews, but laying the proper groundwork can help them go a lot smoother. A performance management system can make implementing these ideas a breeze. Check out ClearCompany’s management software to find out if it’s right for you.  

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