Make Year-End Performance Reviews Work for Everyone

Managing people can be one of the most challenging parts of running a business and year-end performance reviews are often an especially tricky part of the process. But they’re also an essential tool for giving and receiving feedback from your employees.

If done right, your year-end review process can help foster an effective and motivated workforce. If done poorly, it can lead to lacklustre performance and resentment from your staff. Luckily, you can look to these best practices to help you navigate this important but challenging terrain with your team.

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Plan your timing.

Give yourself and your employees time to prepare for year-end reviews by setting the dates well in advance. Many companies do performance reviews in January, as some people may be out of the office during the holidays. Ask your employees to write self-evaluations of their performance when you send out review dates. And if it makes sense for your company, also ask the team to do peer reviews. But be sure to clearly outline how these peer reviews are conducted (especially whether or not they’re anonymous). Give employees reasonable deadlines for turning in both their self-assessments and their peer reviews. You want to make sure they have enough time to reflect and put their thoughts on paper.

Prepare, prepare, prepare.

Collect all your notes about your employees’ performance throughout the year — taking into consideration their self-review, their peer reviews, and any data that is relevant. Square Analytics, for example, breaks down sales data by employee to get a picture of who’s hitting their marks (and who’s not). Organize all your thoughts in a document that you can print out and reference throughout the meeting. You also want to make sure the employee can take the document home to reflect on.

Structure the meeting.

This may sound obvious, but when it comes time for the reviews themselves, make sure to find a place that’s out of earshot of the rest of the team. Start the conversation by outlining the meeting’s agenda. For example, you could say something like, “Today we’re going to look at four key areas: your past performance, your current performance, your peer reviews, and your 2017 goals and objectives.” Then walk them through each, referring back to the document you prepared to help guide the conversation. The review should never be a one-way discussion, so make sure to leave enough breathing room for questions while you share your thoughts. What do they think went well and what didn’t? What are some key barriers to their success? Where do they want to focus their development? What numbers do they think are realistic to hit next year? At the end, make sure that you’re both leaving the meeting on the same page and have set a clear path forward. Employees need to feel like they’ve gotten something out of the discussion, so they have an actionable plan about what to do next.

Avoid huge surprises.

Employees should already have a pretty good idea about what’s going to be said in their year-end review before they enter the room. That’s because, ideally, you’ve had regular quarterly check-ins on their goals to benchmark their performance throughout the year. Ideally, those goals would have been based on the well-established SMART goal-setting technique (specific, measurable, achievable, realistic, and time-bound), so that both you and your employees have a clear evaluation framework. That way, if someone is consistently missing their sales targets, for example, they won’t be surprised to hear that you need to put them on a performance improvement plan next year. On the other hand, if someone has been knocking it out of the park all year and has been told they’re up for a bonus, now’s the time to make sure they get it.

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