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Preparing for and Conducting the Annual Performance Review

Performance reviews are typically dreaded by both manager and employee. The reason for this is simple: for people who work together on a day-to-day basis, personal feelings become almost inextricable from attitudes about actual performance. Even when a manager is entirely objective, the employee may be left wondering whether his or her conclusions are based on business results or personal feelings.

Getting the Annual Performance Review Right

Outsourcing eliminates any conflict. Rather than a scheduling a once-a-year or other periodic meeting, you might take a three-step approach to performance evaluation:

• Preparation, on the part of both manager and employee
• Evaluation, a written document that serves as both a discussion agenda and guide for future action. If Step 1 is conducted properly, Step 2 should contain no surprises.
• Follow-up, a regular review of ongoing activities measured against benchmarks set in Step 2 at appropriate intervals. It’s no less important than either Steps 1 or 2.


Both manager and employee should assemble and exchange relevant documents and other information. At a minimum these should include a position description, performance criteria, and previous performance documentation as appropriate. Because time has elapsed and business conditions have changed since the last review, this is the time to consider revising these documents and criteria. It is especially useful to include feedback from others outside the employee’s department, especially customers, whenever appropriate.

• How well has the employee performed, according to the criteria set forth above?
• What factors inhibited employees’ likelihood of success? What factors promoted success?
• How can further training, exposure, and experience be managed to minimize inhibiting factors and maximize favorable factors?


This step consists of a conversation in which the information compiled in Step 1 is reviewed. Ideally, input from management and employee will play roughly equal roles. During the review conversation, the reviewer and employee might:

• Review all information compiled in Step 1. Any divergence in points of view should be noted and documented.
• Discuss the objectives of both the organization and the individual and align how they can be best aligned.
• Agree to a set of goals for the forthcoming period that are realistic, achievable and measureable.

Each will tie back to overall organizational and personal objectives. Strive to maintain an atmosphere of open dialog while communicating organizational needs effectively. Each review is thoroughly documented for both management and employee.


Because of the day-to-day press of business demands, this is the step that is typically most neglected in traditional organizations. Follow-up is at least as important as the other two steps. Factors to be considered include:

• What new factors have arisen to promote or retard the accomplishment of the goals set forth in Step 2?
• Are the evaluation criteria set forth in Step 2 still relevant? If not, how should they be altered?
• Are there any factors outside this framework that need to be noted?

At CloudForce HR, we understand the need for versatility and innovation when dealing with the complexities of Human Resource Management. We assist our clients by providing proven best practice techniques and methodologies, building the most important resource an organization has available, the Human Resource.

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