This post on common performance review mistakes was originally published in November 2013. It was updated in December 2024 with new information.
Performance reviews play a critical role in employee development, but many organizations struggle to get them right. The data speaks for itself:
- Just 2% —two percent —of CHROs agree that their company’s performance management practices inspire employees to improve.
- Only one in five employees agree that their company gives reviews that are transparent, fair, or inspire better performance.
It’s clear that the once-annual, one-way feedback process isn’t working for anyone. Those statistics are grim but not much of a surprise, considering the fact that many businesses are hanging onto outdated employee performance review processes. It was only during the pandemic that companies began exploring different approaches to evaluating performance en masse.
Some switched to more frequent reviews or adjusted employees’ performance goals. Unfortunately, some did away with evaluations altogether or reverted to their old performance evaluation methods in the last year or two.
Whether or not you made changes to your process, it’s important to regularly take stock of your approach to employee reviews. Are your performance reviews effective — helping employees improve, aligning with your company’s priorities, and fostering a culture of growth? If not, it’s time to make a change.
Keep reading to uncover some of the common pitfalls that could be making your performance reviews less effective. We’ll also share some actionable strategies to turn those mistakes into opportunities for growth and engagement.
8 Common Pitfalls to Avoid for Effective Performance Reviews
Performance appraisals are not just for looking back at what employees accomplished. When done well, they’re powerful tools for employee growth and career development. However, all too often, they fall short of their potential. 30% of performance reviews actually led to worse performance.
Many companies are still giving traditional annual performance reviews and missing out on all the benefits of a modern strategy. If yours is in the same boat, there’s a chance your employees feel uncertain about their performance or undervalued after their reviews. Your managers may be struggling to help employees understand how they’re doing and set goals for the future.
Luckily, most of these challenges boil down to a few common missteps — and they’re entirely fixable. Address these issues to turn stressful evaluations into opportunities for your team members to get feedback and support, celebrate their achievements, and create an action plan for growth. Help your people develop their strengths and gain new skills, align their goals with business goals, and build employee engagement that lasts.
Let’s take a look at some of the most frequent performance review errors. We’ll also share some practical advice for turning evaluations into a process that inspires and empowers employees and managers alike.
Mistake #1: Only Giving Annual Reviews
Why It’s a Problem: If you’re only giving annual reviews, do you know how your people feel about them? Research overwhelmingly shows that they’re unpopular across the board — 92% of employees want to receive feedback more than once a year.
There are lots of risks when you hold performance discussions just once a year, including:
- Reviews are impacted by recency bias, which is when managers base ratings and feedback only on employees’ most recent performance.
- Managers are less likely to correct minor issues or mistakes right when they happen, leaving them to balloon into bigger problems.
- Employees are left feeling unsupported or unappreciated without regular feedback and recognition for their efforts throughout the year.
How to Fix It: Encouraging continuous improvement in your employees requires continuous feedback. In addition to implementing formal quarterly or mid-year performance reviews, you can implement weekly one-on-ones between managers and employees. That way, employees get useful feedback and can apply it consistently rather than just making changes once a year.
Mistake #2: Lack of Clear, Actionable Feedback
Why It’s a Problem: Feedback is only valuable if employees can understand it and take specific actions to improve. Vague or generic feedback like “Good job” or “This needs improvement” doesn’t actually help them understand what they did so well or how they’re expected to change. Without feedback they can take action on, employees can’t make meaningful changes or build on their strengths.
How to Fix It: Train managers on how to provide specific, constructive feedback that their direct reports can act on immediately. For example, imagine a manager telling an employee, “You need to improve your communication skills.” That doesn’t explain to employees how their skills are lacking.
Instead, a manager could say, “In the last team meeting, your presentation was informative, but some team members mentioned they weren’t clear on the next steps. In future presentations, consider summarizing the action items at the end.” This kind of feedback is clear and gives employees actionable steps to take next.
Mistake #3: Reviews That Don’t Align with Business Goals
Why It’s a Problem: Do your employees understand how their individual goals contribute to business goals? If employees only discuss their own goals during performance reviews, they might be left feeling disconnected from your company’s mission. Misalignment can also lead to wasted efforts working on projects that don’t drive results.
How to Fix It: Make discussion of company goals part of the review process and ensure that managers help employees tie their goals to business goals. For example, a marketing manager can talk to their direct reports about how their ad campaign helped the business achieve its objective of increasing its presence in a particular market. Aligning individual and business goals helps your people understand their role in the bigger picture.
Mistake #4: Neglecting Employee Development
Why It’s a Problem: Do your performance reviews at your company only look back at what employees have accomplished since their last evaluation? Or do managers use the time to make plans for the future, too? If not, you’re missing out on the chance to support employee development and show them they’re valued by the organization.
Employees want jobs where they can gain new skills and build up their strengths. 86% would leave their current roles for one with more learning opportunities. Organizations that are not making it a priority to help employees reach their full potential risk disengagement and higher turnover rates.
How to Fix It: Make development a key part of the review process to ensure it stays top of mind. Have managers discuss employees’ personal and professional goals alongside performance as a standard part of every review. That enables managers, employees, and HR (if needed) to create a personalized development plan to support growth goals.
Invest in learning and development to show employees your support and help your organization build a more capable team.
Mistake #5: Focusing Only on Weaknesses
Why It’s a Problem: If performance reviews fixate on employees’ areas for improvement, those can overshadow their accomplishments and strengths. That might leave your employees feeling discouraged, damaging morale and motivation. Too much focus on weaknesses can also make them hesitant to contribute their ideas or think outside the box — and lead to less innovation and growth at your company.
How to Fix It: Balance constructive criticism with recognition of employees’ accomplishments and strengths during reviews. For example, imagine you’re reviewing an employee who struggles with meeting deadlines but often comes up with creative solutions.
During your conversation, take the time to recognize their ingenuity. Then, work together to come up with some time-management strategies. Spotlighting their strengths inspires confidence and encourages growth.
Mistake #6: Failing to Involve Employees in the Process
Why It’s a Problem: Are your performance reviews a two-way conversation or a one-way lecture? If your employees don’t get to share their own perspectives of their performance, they may feel unheard and excluded from the review process, which puts engagement and retention at risk.
How to Fix It: Make performance reviews a collaborative conversation by kicking them off with a self-assessment. Completed before formal reviews with their managers, self-assessments are a chance for employees to reflect on what they’ve achieved and what they want to accomplish next.
Self-assessments can ask open-ended questions like, “What are you most proud of this quarter?” or “What support would help you reach your goals?” Collaboration builds trust and gives employees a sense of ownership over their development journey.
Maximize Employee Talent With Better Performance Reviews
Empower your employees with more effective reviews and feedback. Find out how with our performance management resources.
Mistake #7: Ignoring Follow-Up After Reviews
Why It’s a Problem: No matter how well a performance review seems to go, without follow-up from managers, employees are likely to be left unsure of their next steps. Even high performers may leave the review motivated but lose momentum if there’s no ongoing support or accountability. Then, their goal progress can stagnate and they may miss out on chances to grow.
How to Fix It: Think of performance reviews as the starting point, not the endpoint, of improvement. Create a plan for regular check-ins where employees and managers can track progress and work through bottlenecks. These conversations are also a good time for managers to recognize great work and bring up training or development opportunities.
For example, if an employee commits to improving a specific skill, managers can take time to review their progress and address any challenges during weekly one-on-ones. These check-ins help employees stay accountable and on track.
Mistake #8: Not Using Performance Management Software
Why It’s a Problem: Manual performance management methods is tedious, time-consuming work that’s prone to errors and inconsistencies. When you’re not using software, it’s harder — and for busy HR teams, just not feasible — to track progress, spot performance trends, and ensure fairness.
Manual performance reviews can be frustrating for managers and employees, too. That can lead to a lack of engagement and participation in the review process, making them less effective.
How to Fix It: Streamline your review process, give better reviews, and get insight into overall performance when you leverage a performance management system. Look for platforms with tools that support continuous feedback, goal alignment, recognition, and analytics.
Some tools and features to look for include:
- Customizable reviews and rating scales
- Pre-built templates for quick-start reviews
- Real-time feedback and collaboration tools
- Goal setting and progress tracking
- Employee recognition tools
- Automated analytics and reporting
Ensure your reviews are consistent, efficient, and aligned with both employee and company goals with the help of powerful performance management software.
Ready to rid your reviews of errors and oversights? Solve your performance review woes and experience a process that actually works with ClearCompany.
Discover how ClearCompany Performance Management can help you deliver impactful reviews that drive results. Schedule a demo today.
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