How to Lead Better Performance Review Conversations

Last week I spoke about leading teams through today’s uncertainty, and a central part of leading teams is getting the most out of performance reviews. For many Managers, these will be coming up in the next month or so. Therefore, I thought I’d post on the importance of getting the performance review process right and how to have effective performance conversations with your teams.

Performance reviews are not just about evaluating a team member on their achievements for the year, they are essentially about three things: Performance, Development, and Growth. They are also conversations, so it’s both ways communication.

Performance covers an individual’s strengths, weaknesses, and successes. Development includes identifying any skills gaps and how they can be supported, and finally, growth covers career trajectory.

So, what are the critical aspects to an effective performance review process?

The ‘No Surprises’ Rule

Firstly, the process can’t be a once-a-year conversation, but rather, it should form part of a series of more informal conversations that are taking place at regular intervals throughout the year.

I think, if you’re doing it right, there should be no surprises during performance reviews. They should simply be confirming what’s essentially been an ongoing dialogue between a Manager and their employee. So, having regular check-ins with your team members is critical, especially these days in the age of hybrid and remote working.

Setting Clear Expectations 

When setting up the performance review conversation, both the leader and employee must give it the time and focus it deserves. Afterall, this is someone’s job and potentially their earning potential that will be impacted. We have to provide ample notice and scheduling around 90 minutes for this conversation.

Also, as we know, some employees can become quite nervous during performance discussions, so keep that in mind when establishing the process with team members. Give them time to prepare and set expectations up front.

Using a review document or template with established and agreed KPI’s, and clear performance expectations, linked to organisational goals, helps to provide transparency. Give the employee time to fill out the document with their views on how they performed against targets. This gives them time to prepare their thoughts and provides a structure for your conversation.

The manager also needs to be prepared with past reviews, stakeholder feedback and so on. Be prepared for the meeting, but not scripted and be positive, strike the right balance between being positive and offering critique for improvement.

Transparency is key

This documentation can also help with the more ‘challenging’ conversations where an employee perhaps hasn’t performed as well as expected. Using facts in this way is a fair and open way of talking through the things that could have been handled better. It helps the manager and employee to step through the challenges together. Make sure you really listen to them and take on their feedback and respond accordingly.

Documentations is also important for those times where an employee may challenge a decision or piece of feedback, especially around performance ratings linked to financial outcome.

Clear and transparent criteria in performance rating scales is vital. Be upfront about how performance is measured well before we hit the review phase. This has to be crystal clear for your employees. If an employee is unhappy with their final rating, be prepared to speak to the reasons why and talk them through what they could have done differently. You must be able to support your decisions with facts and data. Any data discussed during a review must be real and factual, not rumour or innuendo. It must be a fair and transparent process.

Looking to the Future 

The performance review process is just as much about the future as it is about the past, so providing space for employees to detail where they want to go and what support they need to get there is essential.

Performance conversations should absolutely include development discussions and open conversations about obstacles that are getting in the way of an employee achieving their goals in their current role and indeed for them to take their next step. Managers must actively listen and act. If you fail to act on the feedback you are receiving, then the process won’t be taken seriously, and you will lose good people to organisations that are willing to provide support and development to their people.

At its heart, the performance review process is about getting the most out of your people and working with them to ensure they can be the best they can be.

Put Your Money Where Your Mouth Is 

Finally, I believe that organisations must be prepared to “put their money where their mouth is” when it comes to the development of their people.

It’s no use promising development opportunities if no budget or time has been allocated. If you are serious about developing your team, make sure you have factored in the funds to ensure you can help take your people to the next level.

The Real Value of Performance Reviews

In the end, performance reviews should never feel like a box ticking exercise or a once a year judgement. When handled well, they create clarity, build trust, and help people understand both how they are performing now and how they can grow from here. For leaders, the real value lies not just in assessing performance, but in using these conversations to strengthen engagement, support development, and bring out the best in their people.