How to conduct an effective annual performance review: the 5 key steps to follow

Entretien annuel efficace
The end of the year is approaching, and with it comes Christmas and New Years’, but perhaps more importantly it’s also the time of annual performance reviews.

Although often criticised, this HR process is more useful than ever. Over 3/4 of European companies rely on it to measure the performance of their employees.

However, it does require a certain amount of up-front work by the manager, as preparation for the meeting cannot be left to the last minute. In order to maximum the benefit of said meeting, managers must adhere to specific rules.

1? Effectively evaluate the performance of each employee beforehand

Before you meet with your employees, it is essential that – as a manager – you prepare an evaluation.

It should enable you to:

  • Identify strengths and areas for improvement – ensure you justify your comments by linking them to specific events that have happened.
  • Select 3 essential development areas that you will discuss with your team member. Not everything can be discussed in detail, so choose the aspects you think are blocking your team member’s progression the most or, on the other hand, areas which will benefit the whole team once they have improved.
  • Make a note of the training courses they have attended. What skills have they developed during the year and what are the short, medium, and long-term outcomes?

Don’t forget to refer to previous years’ reviews and to reread the report of the annual interview for the year before.

2. Anticipate the future

Since you are an excellent manager, you know your employees – their strengths and their weaknesses. Therefore, you should be able to prepare some talking points for potential development areas ahead of your meeting.

The increase in skills and the strategic workforce planning are at the core of performance reviews and are essential to the optimisation of companies. 

Therefore, you should have already thought about: 

  • Employee objectives: in relation to the overall team, and also incorporating objectives based on individual behavioural aspects.
  • Possible changes within the team, and more widely within the company. Cross-functional moves should also not be neglected.
  • Support and training needs

If your employee is involved in several projects ask the different project leads for feedback on your team member’s skills and behaviour.

During the review you will be able to discuss your thoughts and also gain an insight into your team member’s own opinion and views. Offering to improve their skills also shows support and confidence in their potential, and future career with you. 

3. Arrange a time that suits both parties.

In order to really make the most of the annual review, both you and the employee must be able to prepare for it.

 

Give employees at least 15 days’ notice of the meeting, and let them know them how long it will be. Send a calendar invite for 2 hours so that you both have plenty of time to discuss what you have prepared – you want the meeting to be productive and not rushed.

For many employees the annual performance review remains a source of anxiety. You can help make them feel more comfortable by being upfront on what you aim to get out of the meeting, as well as the format. 

The whole objective is to have a meaningful discussion on past performance and also focus on goals for the year ahead.

4. Meet with your direct superior or the one above or even HR.

Due to lack of time, this step can often be overlooked.

 

However, if you want to make this performance review a real strategic lever for development, we advise you meet with the employee’s line manager.

 

The latter will be able to share with you their experiences of the employee and suggest areas of development in relation to the skills required and/or already available within the team.

 

A quick meeting with HR can also be useful to ensure you’re aware of the various training opportunities available within the company.

5. The annual performance review

In order to be effective, the meeting must follow a number of rules:

 

  • Have paper readily available so you can make notes if appropriate 
  • Don’t monopolise the conversation: 70/30 is the recommended ratio, with the employee doing most of the talking
  • Ask the employee what challenges they have faced and any areas they would like to develop in
  • Don’t address the issue of pay: talking about pay can derail the conversation and interfere with the positive conversation you are trying to have. If pay is brought up, let the employee know you will arrange a separate meeting to discuss the topic.
  • For each objective you propose let the employee know how they will be supported in achieving it
  • Conclude with a quick summary of the points discussed, a reminder of the next steps, and the main objectives for the coming year. 

 

The annual performance review must not under any circumstances be turned into a disciplinary meeting. Discuss challenges and areas for improvement in a friendly manner and be open to understanding their perspective. Remember, the review should be a two-way conversation.

 

Once each meeting is over, take the time to summarise your discussions by way of meeting notes/a report. Share this document with each employee so that both parties can sign and confirm your mutual agreement.

 

It will also be useful to have this documentation when it comes to the next annual performance review.

 

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