Transforming the Annual Performance Review featured image

Transforming the Annual Performance Review

By: Meggan Flaherty

~ 3 minute read

Every year, many leaders and their teams dread performance reviews. Why? A staggering 86% of employees feel that their performance reviews are not motivating them to improve. Traditional performance reviews often focus on fixing weaknesses or include ambiguous feedback wrapped in a compliment sandwich. But what if you could change that?

Imagine a world where you transform the annual review from a feared event into a more frequent and timely coaching session. By making small changes and committing to providing meaningful feedback, leaders can learn that when you create transparency, engage in meaningful dialogue, and adopt a forward-looking approach, people might not want to leave their jobs after their reviews. Let’s explore some ideas on how to create a dialogue. 

Laying the Foundation for Success

Trust is paramount for effective performance reviews. Establishing trust with your team members will lead to increased focus, higher productivity, and 400% greater job satisfaction. Understandably, employees approach reviews with varying degrees of trust, heavily influenced by their past experiences. As a result, resetting the stage for performance reviews is key for building trust. 

This involves:

  1. Communicating Positive Intent:  Make it clear to your employee that the purpose of the review is to have a dialogue to support their growth and development. 
  2. Sharing the Agenda Ahead of Time: Clarity about what will be discussed can ease nerves, allowing employees to prepare their input.
  3. Speaking Your Employee’s “Language”: Tailor your communication to meet the motivating needs of each employee, being ready to adjust as necessary.

By setting clear intentions and expectations, sharing the agenda, and adapting your communication style, you will create a more open and constructive conversation.

Creating Transparency

Transparency is not just a buzzword; it’s a critical component of the modern workplace. 80% of workers crave a better understanding of decision-making processes, and 87% of job seekers prioritize transparency in their future employers. Leaders who practice transparency will foster an environment of trust and likely see the team increase engagement, lower turnover, and, ultimately, higher profits. 

To achieve this, clearly communicate the review’s objective with your employee:

  • Development for Future Roles: Focus on one or two areas for growth or development to capitalize on great performance. 
  • Elevating Performance: Identify 1-2 actions that will take your team member from good to great performance.
  • Addressing Performance Challenges: Give clarity on what needs to be adjusted to meet performance standards.

Being transparent about the review’s goals demystifies the process, enabling you to better support your employee’s success.

Less Monologue, More Dialogue

If you find you’re doing most of the talking in reviews, try a different method. Instead, adopt a coaching approach to giving actionable feedback that includes active listening and powerful questions. Apply Adam Grant’s suggestion to kick-off the conversation with, “I am giving you these comments to you because I have very high expectations of you, and I am confident you can reach them.” 

Then create the dialogue with the following:

  • Share observations of trends over time, not isolated incidents.
  • Explain how their actions impact the team (positive or negative).
  • Ask for your employee’s thoughts and work together to develop steps they can take and discuss any possible challenges.
  • Based on your conclusions, set realistic, actionable goals.

During the conversation, encourage your direct report to share their perspective by asking them open-ended questions. Remember, sharing the agenda or the questions you intend to ask ahead of time can make this feedback-sharing process smoother. 

Be Future-Focused

The annual review should be a time to collaboratively envision the future rather than dwell on the past. Staying future-oriented also helps the employee connect their work and performance to the company’s goals. Focus on setting positive, attainable goals and encourage employees to utilize their strengths. Plan to continue the conversation beyond the annual review to maintain engagement, ensuring accountability through regular follow-ups.

Taking Your Next Step

To make performance reviews better and focused on growth, we need to change how we think about them. By building trust, being clear, having real conversations, and planning for the future, you can make reviews a dialogue that helps your team members improve performance and feel more engaged. Turn what was once a source of anxiety into a valuable opportunity for development and relationship building.

Here are three ideas to start transforming your performance reviews:

  1. Implement Regular Check-ins: Don’t wait for the annual review to provide feedback. Regular, monthly, or quarterly informal check-ins can keep the dialogue open and constructive.
  2. Teach Leaders How to Coach: Equip your leaders with the skills to ask powerful, forward-looking questions that inspire action and growth.
  3. Foster a Culture of Continuous Improvement: Encourage an environment where everyone is open to giving and getting timely feedback, not just once a year.

In the end, the goal of reviews is to help everyone feel motivated, involved, and ready to grow. By using these ideas, your reviews can help the whole team improve.

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Meggan Flaherty

Combines a strategic vision with a personal touch in talent strategy. Known as the "white water rafting guide," she's an outdoor lover, mountain biker, and trail runner, dedicated to developing human-focused, data-driven talent strategies.