One Gallup study shows that employees are four times more likely to be engaged when they receive meaningful feedback. But there’s room for improvement in this respect, as only 28% of employees strongly agreed that they’ve received meaningful feedback from their manager.

With employee turnover rates rising, you should learn how to conduct a performance review to keep employees engaged and show them you appreciate their hard work and care about their development.

In this article, we’ll see the main steps and best practices for conducting a fair, effective, and constructive performance review meeting.

How to conduct a performance review in 4 steps

Conducting performance reviews effectively isn’t hard if you follow simple steps. Here’s what you need to do.

Teach employees the importance of performance reviews and how to give feedback

Performance reviews are a valuable tool for both managers and employees, and you should communicate the advantages to your team. Some of the benefits include:

1. Giving and receiving feedback – Reviews provide an opportunity to give and receive feedback, which is necessary to identify areas of improvement and facilitate personal and professional growth.
2. Recognizing achievements – Celebrating successes when they happen is essential. It allows you to show people you value their work and foster a culture of continuous growth within the company.
3. Aligning goals and expectations – Performance reviews can also help you align goals and expectations between the company’s vision and the employee. It’s crucial for improving employee engagement.
4. Boosting motivation and engagement – Reviews help foster manager-employee relationships and retain talent. Moreover, people like to get feedback regularly and feel more motivated when they do.

You should also convey to your team the importance of providing truthful, accurate, and up-to-date feedback. Here are a few pointers you can give them:

1. Be specific – Focus on concrete examples and actions.
2. Be timely – Give feedback right after the event or behaviour – as soon as possible.
3. Be constructive and positive – Provide feedback that helps the person improve and grow, not just criticize or blame. Highlight what they did well and what they can do better next time.
4. Be respectful and empathetic – Consider the person’s feelings and perspective, and avoid harsh or judgmental language. Use “I” statements instead of “you” to express your observations and expectations.
5. Be goal-oriented – Align your feedback with the person’s goals and objectives, and provide clear and realistic suggestions for improvement. Avoid vague or general comments that do not offer any guidance or direction.

Gather all data and feedback

Good feedback relies on data. You need to gather it and prepare for the meeting. Check the employee’s accomplishments and their biggest downfalls, if any. Name specific examples in each case. Look at the previous review cycles and your notes from these meetings. Did the person improve in the areas you highlighted then? Did they learn other things?

In general, there are two main ways to collect feedback:

1. Manually – using software such as Google Forms, Excel, etc.
2. Automatically – using performance review software such as Effy AI. The great thing is that it can also help you structure and analyze feedback.

Schedule the review meeting and run it

Now that you have all the data, you must schedule a meeting. Once you set the date, keep to it, if possible. Use software tools to partly automate the process, set up reminders, etc.

When the time comes to meet, there are a few things to remember about the structure and flow of such conversations:

1. Break the ice – Don’t start the conversation with the review. Performance reviews can be stressful, so build rapport, break the ice, and help the person feel at ease.
2. Start on a positive note – When you get to the part of the conversation focused on performance review, start with something positive. Mention the employee’s successes, and say what you like and value about their work. After that, you can gradually introduce critical, constructive feedback regarding their weak points.
3. Make it a two-way conversation – A good performance review should be an exchange, not a monologue. Try to understand the employee’s perspective, and remember that both sides have something to gain from feedback.
4. Remember that work isn’t everything – Try not to make the entire conversation about work and performance results. We’re all human, and we like to laugh and get to know the person on the other side of the table better.

Also, remember the pointers related to providing feedback we’ve mentioned in the first step – they’ll be beneficial now.

Create an action plan and follow up

Feedback is worthless if people don’t act on it. Outline the following steps and expectations for the employee, and set SMART goals. Agree on a specific timeline and a follow-up plan.

Moreover, you should provide employees with the tools necessary to improve their skills – especially learning sources. Some of the potential examples include:

• Online courses and webinars – The Internet is a rich resource for those who know what to look for (and how to do it). Focus on lessons created by well-known brands.
• Training sessions within the company – You can also run great training sessions internally. It won’t cost you much and can effectively boost your employees’ skill sets.
• Local and international conferences (if you have a conference budget) – Conferences are a great way to learn. You can also use them to grow your brand, along with the personal brands of your employees.
• Books penned by renowned experts – Even in the Internet age, books remain a valuable source of knowledge. Look for publications by well-known experts in your field.
• Industry-specific portals and magazines – Most industries have specialized media created just for them. While the quality varies from outlet to outlet, they can be a great source of helpful knowledge.

Conclusion

A performance review is a valuable opportunity to provide your employees with feedback, recognition, and guidance. It’s also a great moment to foster a culture that helps engage people in what they do and build employee-manager relationships, which are vital for effective business operations.

Planning and conducting these conversations is one of the most critical skills leaders must learn, and we hope the tips in this article will help you with that. Good luck!