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5 Tips for Conducting a Successful Annual Employee Review

Opinions expressed by Entrepreneur contributors are their own.

Performance reviews themselves are on the hot seat, according to indicators from some major corporations and research firms, which show that most managers aren’t happy with how their companies handle performance reviews.

But before you throw your entire performance review process in the office dumpster too quickly, you should know that universally, employees do want to know how they’re doing and companies very much do want to have effective workers.

With that in mind, here are valuable things that I’ve learned over the last 20 years as an executive when it comes to conducting effective and successful annual reviews that empower my employees and direct reports.

Related: 4 Things Leaders Misunderstand About Performance Reviews

1. A review should be the culmination of a years’ worth of conversations.

If you, as the manager, are conducting regular check-ins with your employees throughout the year, what you discuss with them during the annual review should not surprise them.

Before the annual review happens, ensure employees know how you will evaluate them and how often. Also, make sure to encourage your employees to be involved in determining their metrics for success.

Related: How to Conduct Employee Performance Reviews That Reduce Stress

2. Start by reviewing the goals you established during the last annual review.

A proper and meaningful annual performance evaluation should start by reviewing the goals you and your employee discussed and agreed upon during their last annual review. I have found that it helps create alignment regarding the company’s goals and brings the conversation full circle.

Put employees in charge of their performance review process by empowering them to succeed. Make sure they know that they have the control to achieve great things, both in this role and for themselves.

3. A review should be at the same time every year and conducted in the same format.

Changing criteria sometimes is a necessary evil, but selecting a form and a time that works for you and sticking with it creates the best and most consistent way to measure employee success.

That being said, also be open to considering informal reviews, or changing once-yearly sessions to four short quarterly catch-ups (possibly walk-and-talks or brown-bag lunches).

4. Offer constructive criticism, but make sure to call out big successes.

Use the time to offer constructive criticism, but also make time to call out big successes from the reviewed period. Although you will use this meeting to address shortcomings, it is also vitally important to show gratitude for wins and efforts made.

Information on any new qualifications gained by an employee, participation in seminars, conferences, courses or involvement in special projects should all be positively acknowledged and documented.

For problem areas, identify improvement and growth areas together, with a 3-to-6-month plan marked by mini-milestones.

You will gain more respect by having a healthy balance between the carrot and the stick — and use more carrots than sticks!

Related: 5 Steps to Providing Constructive Criticism

5. Try to conduct annual reviews in person.

It is much easier to read body language in person, and an in-person meeting ensures that the topic of conversation is getting the attention it deserves.

If you must conduct an annual review virtually, I recommend insisting upon specific location requirements (e.g., a quiet spot in the person’s home) and that they turn their video camera on.

When handled thoughtfully, a performance review can leave staff feeling motivated — even enthusiastic — and focused about their career progression within your firm.

It also gives you the confidence to know you have addressed areas of improvement while inspiring your team for the upcoming year.

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