[Updated November 11, 2013]: I originally wrote this post back in December, 2010, and reviewing it there's one more step I'd like to add to this list: empower employees.
Yup that's right. After all, it really is all about their performance and development. So get them to complete a self-appraisal. Have them draft their goals and development plans, then collaborate with them to align these to organizational goals and finalize them. Engage in two-way dialogue about performance, expectations, challenges and areas for growth.
When you put the power in the hands of your employees, they become more accountable for their performance and development, and usually more committed and motivated as well. Effective performance appraisals aren't something managers should "'do'' to their employees; they're something you should both work on together.
Whether you're a manager now or were one in your past life, you've probably seen performance appraisal season coming and dreaded it. The process is time-consuming, you have to squish the appraisal meetings in between an already heavy workload, and well, sometimes you need to give feedback that can be hard to deliver.
Here's the thing...
You shouldn't use performance reviews to give your employees feedback.
I know - sounds crazy right?
Here's why you shouldn't give feedback during performance reviews
Feedback, especially constructive feedback, on areas where employees need to improve will never be effective if you save it up for the end of the year. The feedback - both positive and negative - needs to be given at the time a success or issue occurs; it's counterproductive to give feedback weeks or months after the event.
A common pitfall to waiting to deliver feedback all at once at the end of the year is that we tend to either focus too much on recent performance, or we paint the entire year's performance with too positive or too negative of a brush based on one significant event.
Another pitfall is that failing to give employees regular timely feedback on their performance impacts employee satisfaction, productivity and retention.
By making the performance review a once-a-year discussion, it becomes difficult for you as the manager to appropriately communicate expectations. You may think you've done an excellent job at outlining role responsibilities, but without regular, ongoing feedback throughout the year, your employees will never really know how well they are performing and how their activities are impacting organizational performance.
The key to an effective performance review is the review. Use the end-of-year appraisal meeting to review with your employees the achievements, setbacks, development and training that have already been discussed throughout the year - and then use this information to set a development plan for the coming year.
Here's how to set the right expectations.
Year-round effort decreases the effort - really!
Most managers dread writing performance appraisals because they take so much time and effort. However, when the performance appraisal process is a year-round activity, you can conduct shorter meetings to address targeted performance areas.
Take the opportunity to discuss and record milestones, accomplishments, successes and challenges as they occur, when the details are fresh in your mind.
Doing so enables you to better monitor progress on goals and take immediate action to reward or remedy behavior as required.
These meetings also allow you to offer your employees the opportunity to contribute their own perspective and make suggestions about their performance. Allowing your employees to contribute to the process gives them visibility and accountability into their own success.
Year-round performance discussions decrease the effort involved in conducting performance reviews effective performance appraisals because they enable you to provide needed feedback when it's most valuable. Which means you and your employees can keep performance discussions focused on development and goal-planning for the following year.
Here is a great reference article you can use for further information on writing effective performance reviews.
Make a list, check it twice (then again, and again)
Properly documenting individual performance and discussing it with your employees throughout the year can help to ensure expectations are understood and that employee development and goal-setting becomes the focus of the appraisal process. (This message about goal setting sounds repetitive but it bears repeating!)
Use a performance appraisal checklist, like this one, to ensure nothing gets overlooked.
Take the time to review, modify or set new goals and establish an action plan including opportunities for growth and advancement.
Remember, feedback is only effective on a just in time basis so take every opportunity to discuss how your employees' individual contributions directly impact the organization's mission and priorities.
Don't be left in the dark
Your role as a manager is to guide and nurture employees to reach their objectives and to provide constructive feedback and coaching to get them there.
That said, don't just depend on your own feedback. While your feedback is valuable to the appraisal process, collecting feedback from peers, other managers and even external stakeholders, such as customers, can give you a broader view of an employee's strengths and areas requiring development.
Your role going forward...
If you haven't been providing effective performance feedback all year, forget about giving negative feedback now - it's too late. (Jamie Resker however has some great advice on how to use the performance review to talk about future expectations.)
Keep your discussion centered on areas for development. This appraisal meeting should be a discussion about how you, the manager, and the organization can help your employees do their jobs and increase their performance in the future.
Going forward, take the time to carefully prepare for the performance review process, and make an effort to discuss performance with your employees throughout the year.
Talent management software and tools can help automate many of the tasks associated with providing this on-going feedback making it easier to document and assess needed performance information year-round.
If you make an effort to provide on-going feedback throughout the year, I guarantee that when next year's appraisal season arrives, nothing you discuss with your employees will be a surprise.
You and your employees will have the entire year's performance information and associated feedback appropriately documented and the performance review meeting will be a quick and effective meeting focused on development goals.