Annual Performance Reviews: How to Maximize Their Effectiveness

I have been taking part in annual performance reviews for approximately forty years, beginning with Officer Performance Reports (OPRs) as a lieutenant in the United States Air Force, to earlier this week as a faculty member at Augusta University (AU). I have sat at “both sides of the table” for such reviews, having been evaluated for each of those forty years, while also being the “evaluator” for at least seventeen of those years as an administrator at Kennesaw State University (KSU) and here at AU. During one year at KSU when I chaired two academic departments, I conducted sixty annual reviews for the full-time faculty members who reported to me. I have learned much about annual reviews from my experience, both as the “rater” and the “ratee.” While many employers are doing away with annual performance reviews, they are still prevalent in many companies and industries. So, in today’s column, I will share with you what I’ve learned from my annual performance review experience that you can use, whether your firm still conducts annual reviews or has adopted other forms of employee feedback.

1. Make the Annual Performance Review part of a portfolio of more regular feedback. Many of the firms that have done away with annual performance reviews have replaced them with more frequent, informal check-ins. My advice is to do both. Make the annual review the culmination of regular feedback that occurs throughout the year. Employees, particularly younger ones, desire frequent feedback and you also want to reduce the chance of the annual review feedback surprising the employee. The annual review itself is still extremely valuable because it allows you to do many of the things below.
2. Set Goals and Expectations at the beginning of each new performance year. One of the best parts of the AU performance review system is having the ratee set his/her goals for the coming year and then discuss those goals with his/her supervisor. This ensures that both parties understand and agree to mutual performance expectations for the coming year. It is also extremely helpful if those expectations and goals are quantified if possible and if there are expectations that are not quantifiable (see some examples below), examples of expected performance should be provided.
3. Allow for Ratee Self-Evaluation prior to the annual performance review meeting. Prior to the supervisor and employee meeting for the review, it is a good idea to have the employee self-evaluate his/her own performance. This is another good attribute of the AU performance review process that allows the supervisor and employee to share each other’s perspectives on the employee’s performance. This will allow the supervisor to potentially gain some information on the employee’s performance that might have been missed when evaluating him/her and it gives the supervisor and employee the ability to discuss how their perception of performance might differ and clear up any misunderstandings.

4. Make the Annual Review not only about accountability for past performance. Traditionally, annual performance reviews have been about accountability for past performance. Those of you who have read my columns in the past know how strongly I feel about accountability. However, to make the annual performance review more effective, it needs to be about more than such accountability. It is a great opportunity to coach, manage, and mentor to help improve current performance and groom that person for future positions of greater expectations and responsibilities. Also, use the review to provide intrinsic rewards to recognize progress being made on the job.
5. Use the Annual Review to infuse teamwork, collaboration, morale, and other elements of organizational culture. The annual review is a wonderful time to demonstrate to employees the importance of being a productive part of the organizational team. This is an area that is difficult to quantify, so you must discuss this with the employee with examples. Reward them for behaviors that promote working well with others and promoting the culture of your organization. If they are not doing well in those behaviors, provide them feedback on how they could better work with others and connect better with how the organization operates. While individual performance is important, how an employee fits with the rest of the team is critical, so addressing this during annual reviews (and during other feedback) is paramount.
6. Using “Rating Scales” and Numeric Values. Much of the criticism of annual reviews comes from the use of rating scales (for example, Exceeds Expectations, Meets Expectations, Does Not Meet Expectations) or scoring performance on a five- or ten-point numeric scale. However, when many companies eliminated such scales, many employees complained because a lot of people were motivated by their “score.” I have found that this is a tough one. While I agree that such scores can motivate, they must be used properly. Not everyone in your organization exceeds expectations or scores the maximum number on the scale. When such scales are used, they must be accompanied by detailed narrative feedback to ensure a more complete picture is provided to the ratee.

While the annual performance review has fallen out of favor in recent years, I think much of it has to do with its less-than-optimal implementation and use. Hopefully, using the tips above, you can use the annual review as a valuable tool in your feedback toolbox.