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6 Tips for Writing an Effective Performance Review

image for Andrey_Popov/Shutterstock
Andrey_Popov/Shutterstock

A performance review can create value for employees and employers alike. It has the potential to highlight what is and isn't working, identifying areas for growth and planning for the future. A strong review can be difficult to write, however. This is especially true for managers who are often not given enough guidance on what an effective and comprehensive review looks like.

Further compounding the problem, small businesses frequently struggle with limited resources. The time and staff required to conduct accurate performance reviews for a company with 1,000 employees ideally requires a full-time HR staff of 14, according to recent estimates published by Bloomberg BNA.

Even a company with 100 employees (or less) needs a full-time individual who compiles performance data from managers, who spend an average of three hours on each employee review.

To reduce the financial burden on small businesses, you might consider integrating performance management software into your annual reviews process. Such companies as InsperityNamely and ADP TotalSource are HR platforms that help small to midsize businesses work through how to effectively give feedback to your employees. 

A quality performance management system delivers real-time reporting and enhanced collaboration between employees and management. The platforms easily help you complete the process and stores the results for review later on, resulting in greater employee engagement and retention. But even in such a program, you still need to know what to say and how to say it. 

While performance reviews typically happen once or twice a year, feedback should not be limited to that short period of time. You should be offering consistent assessments throughout the year so there aren't any surprises.

"Don't catch your people off guard in a performance review," said Erika Rasure, assistant professor of Business and Financial Services at Maryville University. "This should not be the first time that they are hearing from you that they are not performing as expected. Be clear in writing [and] sending calendar invites, and setting expectations and the tone for the meetings." 

You should also make sure you are taking constant notes on employee performance – especially when there are no performance reviews on the horizon. 

"Employees deserve a robust assessment of their work for the entire period being covered," said Gary Schneeberger, founder and president of ROAR. "Far too many performance reviews are based only on what the manager can remember from the last few weeks before the evaluations are due to HR. Managers have to be intentional about taking and filing notes."

Don't neglect your top performers. If you're only addressing issues or focusing on the employees who aren't performing as well as others, you're missing an opportunity to express gratitude to those who shape innovation, creativity and the culture within your company. Though they may not need as much guidance as other employees, these individuals can lose their passion or motivation if they are not occasionally recognized.

"Highly valuable employees who do their job and do it well are often not the priority of concern in performance review cycles, resulting in missed opportunities to communicate how much the organization values the drive and the results of the top performers," said Rasure. "An unexpected 'keep up the great work' email, a quick phone call or text sends a consistent signal to your employee that you are paying attention and value what they do."

No worker is perfect, and there will always be room for improvement. Decide what is worth addressing and don't hesitate in doing so. If there is an issue that you know is affecting you and your team, don't avoid it. Tiptoeing around the subject will not get you anywhere.

James R. Bailey, professor of leadership at the George Washington University School of Business, encouraged being truthfully (but not brutally) honest with workers. Deliver feedback in a way that you would want to receive it if you were the employee. The discussion is crucial and unavoidable, so choose an appropriate approach and stick with it.

"If someone is a poor performer and you don't squarely address it, know that everyone else in the office knows that the person is a poor performer, and [employees] will brand you as weak or cowardly for not addressing the situation," Bailey said.

Managers should also demonstrate and expect clarity, said Leon Rbibo, president of Laguna Pearl. "There needs to be crystal-clear clarity on both sides of the table, both in what the manager expects from the employee moving forward and in what the employee needs from the manager."

Without clarity, Rbibo said, nothing you discuss during the evaluation will help the situation, and you'll find yourself discussing the same topics at the next performance review. So be clear, be honest and remember that nothing will change if it is not addressed.

The written review should be a brief but direct overview of discussion points, making for a more nuanced face-to-face conversation. Schedule a meeting in a coffee shop or out-of-office location to provide a comfortable atmosphere. If you're reviewing remote workers, schedule a video chat so you're still having a live conversation. This approach leaves room for discussion and feedback on their end and prevents any miscommunications.

"The only way to deliver performance reviews is face-to-face, with ample time to present and process, listen and respond," said Bailey. "It's just too important to relegate to email or telephone. Doing so would send a signal that you didn't care enough about the subject to even take the time to meet."

After outlining any shortcomings or mistakes, take the time to discuss resolutions to those problems, and push employees to comment on the issues you raised.

When discussing areas for improvement or things an employee has done well, make sure you have clear examples to reference. (This is why it's important to take notes over a long period of time.) 

"If you've got nothing to refer to, then you're speaking anecdotally," said Rbibo. "This prevents clarity and understanding. If an employee is falling behind in certain key performance areas, point to one or two specific examples and address how you'd like those handled differently in the future." 

Having examples proves to the employee that you are paying attention, and it adds credit to your expectations.

Don't leave the review without mutual understanding and respect, and don't let any employee feel like they're in the dark going forward.

"Use the review process as an opportunity to set attainable goals specific to addressing the expectations the employee isn't meeting but which also makes the employee feel like they have a clear, reasonable plan of action that can get them back on track," said Rasure.

Encouraging your employees and expressing your appreciation gives an added boost to a primarily good review, or it lifts your employee's spirits after a somewhat negative evaluation. Positive reinforcement and constructive feedback can go a long way in giving workers the confidence and drive they need to perform better.

Pay close attention to how you phrase your evaluations. Here are five words and expressions that will help you effectively highlight an employee's contributions, based on James E. Neal's book, Effective Phrases for Performance Appraisals (Neal Publications, 2009). 

  • Achievement: Incorporate this into a phrase, such as "achieves optimal levels of performance with/for ... "
  • Communication skills: Phrases like "effectively communicates expectations" or "excels in facilitating group discussions" go a long way with an employee.
  • Creativity: Appreciating employees' creative side can make for happier, more motivated staff. In a performance evaluation, try "seeks creative alternatives," followed by specific examples and results.
  • Improvement: Employees like hearing that they are improving and that it's being noticed. "Continues to grow and improve," and "is continuously planning for improvement" are two constructive phrases to use in a performance review.
  • Management ability: Leadership skills and the ability to manage others is key for employee success. Incorporating phrases such as "provides support during periods of organizational change" carry weight with your employee. 

Richard Grote, author of How to Be Good at Performance Appraisals (Harvard Business Review Press, 2011), said that instead of using terms like "good" or "excellent" in a review, employers should opt for more measurement-oriented language.

In an interview with Hcareers.com, Grote noted that action words like "excels," "exhibits," "demonstrates," "grasps," "generates," "manages," "possesses," "communicates," "monitors," "directs" and "achieves" are more meaningful.

Mastering your language and approach are your first steps. The true cost of performance reviews to your organization is the time spent by managers and HR staff gathering and writing the material that serves as the foundation for each review. And that's where performance management software can help. 

Depending on your HR requirements, you can incorporate an open API system or outsource the entire process to a third party. Companies like Namely offer an open API platform that allows you to customize the software depending on the size and scope of your HR requirements. 

This type of system allows managers and HR staff to set and monitor goals, and create custom reviews. It also automatically solicits responses from managers, employees and peers for the review cycle. They create a process for an employee-centered review that's known as a "360 review." Employees can use the custom-built API platform to self-serve many of their HR needs, which can save your team hours each week.

The other method that provides cost savings is a Professional Employer Organizations (PEO)s like Insperity or ADP TotalSource. Ideal for small to midsize companies looking to reduce their HR expenditures, this option allows you to outsource performance reviews and other HR tasks through a co-employment arrangement – a contractual agreement where the provider assumes responsibility for assigned tasks.

Using the company's apps, managers and employees have real-time access to payroll, time and benefits. PEOs also have the added benefit of providing a full range of professional HR benefits, including compliance with the latest employment regulations.

Schneeberger remembered an intern who refused to accept her review because the ratings were not all "exceeds standards." 

"Her reason for the protest was that she tried really hard," he said. Knowing her boyfriend was a basketball player, Schneeberger asked the intern if his working hard at every practice automatically meant he should start, and she was quiet.

"I pointed out that my job was the same as his coach – to help her get better so she could figuratively get off the bench and into the game as she embarked on her career. I needed to teach her how to get better – and I couldn't do that if she was already perfect." 

Sergei Brovkin, founder and principal of Collectiver, recalled a manager who held very informal, unhelpful evaluations. "[He] would do it once a year, during his lunch, while working on emails," he said. "That was one of the reasons I left the company." 

Mike Cox, president of Cox Innovations, spoke of a time when he was serving as an HR leader and had a colleague come to him with the decision to terminate an employee. Upon reviewing the employee's performance evaluations, Cox could not see any evidence of poor performance or mistakes. 

"I was told that the employee was performing poorly at the time of the review but was considered very important to an ongoing project, so [they were given] an inaccurately positive review to avoid demotivating [the employee during] a critical period in the project." Cox advised against terminating the employee until a fair evaluation was given. The employee was terminated anyway and wound up suing for wrongful termination, leading to a costly settlement for the business. 

Additional reporting by Sammi Caramela. Some source interviews were conducted for a previous version of this article.

Kiely Kuligowski

Kiely is a staff writer based in New York City. She worked as a marketing copywriter after graduating with her bachelor’s in English from Miami University (OH) and is now embracing her hipster side as a new resident of Brooklyn. You can reach her on Twitter or by email.