The top 10 performance management mistakes you’re probably making

How to turn your team’s year-end appraisals into your best motivation-generating asset

The new year is always synonymous with year-end reviews and brand-new twelve-month development plans. But despite their best intentions, most businesses seem to miss the mark. Research shows that performance reviews and ratings don’t seem to have an impact on organisational performance whatsoever. Yet, despite this startling fact, over 80% of companies still dedicate huge amounts of resources to this costly exercise.

Based on this, you may think that we are about to recommend getting rid of performance reviews altogether. Well, not quite. Sitting down with staff to recognise their contribution is never a bad thing. But we believe there are ways to take formal appraisals from a negative, draining experience to a motivation-generating opportunity for growth that will ultimately benefit both the organisation and its people. Or as we like to say, less of the stick, more of the carrot. And to help you do this, here is a quick list of the top 10 mistakes to avoid during formal appraisals. 

Mistake 1: Not being prepared enough

Time-poor managers may have a long list of employees to review, so it’s understandable that some may skip the preparation bit. But don’t forget this process isn’t about you. It’s about your staff and recognising the contribution they have made during the year. They deserve time and focus. Don’t do appraisals on the fly: set time aside in your agenda to prepare ahead of time and gather feedback from others so that you have enough input for a comprehensive review of the entire year.

Mistake 2: Avoiding the negative feedback

Many managers do not feel confident having difficult conversations. But for growth to happen, there needs to be honest conversations about the skills gaps your team members need to fill to progress to the next stage of their careers. This doesn’t mean that negative feedback shouldn’t be handled with care. Prepare what you want to say in advance, rehearse it if needed or get coaching to increase your confidence. Some techniques such as role play can give you the tools needed to support employees and help them not only learn from their mistakes, but strive to overcome them. Remember that good managers will set the bar high, but also provide the necessary support to reach it.

Mistake 3: Not being focused enough

For most people, a formal review can be a nerve-racking experience. Add to this the crushing feeling of preparing a list of important points to discuss with your manager only to find them glancing at emails or checking their phones and you may have the perfect recipe for a demotivated employee. Annual reviews are all about recognising the contribution someone has made throughout the entire year. It’s important to give them the time, focus and attention they deserve.

Ensure you have allocated enough time so that you don’t have to rush. Shut down all distractions such as phones and emails and take a few minutes beforehand to get your head straight and decompress from whatever you were doing before going into the meeting.

Mistake 4: Bringing up new elements

At Let’s Talk Talent, we think regular and consistent developmental feedback is the best way to help people grow and develop. After all, you wouldn’t expect a director to watch an actor rehearse for months only to give them feedback just before the big premiere. The same goes for performance management. So what’s the point of an annual review if you’ve given feedback consistently throughout the year?

Appraisals should be a compilation of all the discussions you had with your staff. Kind of like a showreel of their contribution. Dropping anything new into the mix risks putting employees on the backfoot and prevent them from being fully receptive. When preparing your notes, make sure you leave any new feedback item out, to be handled in a separate meeting.

Mistake 5: Not reviewing the whole year

As mentioned, appraisals are showreels designed to recognise employees’ contributions over the past twelve months. Recent events shouldn’t overshadow the entire period. Performance isn’t a static concept. It varies based on context, both internal and external, and needs to be calibrated accordingly. To avoid focussing solely on most recent events, keep a written trail of your discussions throughout the year and revisit your notes ahead of the year-end review.

Mistake 6: Bundling appraisals and pay discussions

It’s no secret that both reward discussions and performance reviews can be hugely emotive. Whilst they may seem linked, it’s best to view them as two separate entities. Pay increases can be influenced by many external facets such as market rates and organisational salary brackets. Mixing those with performance feedback can make it difficult to distinguish between the two. A bit like trying to pick the chocolate chips out of the cookie dough. This could lead to performance messages being lost and employees leaving the meeting feeling deflated even after a positive performance review.

Ensure you book two separate meetings and give enough context during each session for staff to fully understand which factors are at play, and what they can actually influence by working on the skills, knowledge and behaviours that make up their contribution. 

Mistake 7: Focussing on the process, not the individual

The purpose of year-end reviews is clear: recognising your people’s contribution and setting them up for the next twelve months. It bears repeating, as it’s easy to lose focus and go through the motions of ticking the boxes. Formal reviews shouldn’t be about submitting the right forms to HR. In fact, whilst your HR department can set up the framework around performance management and lead the process, accountability should be shared by the entire business. So go ahead, adapt your approach to find out what works best for your specific context. Use this opportunity and take the time to truly get to know your team. Learn more about their skills, knowledge and behaviours so that together, you can set stretching objectives that will be aligned with their career development goals for the year ahead.

Mistake 8: Doing all the talking

It may come as a bit of a shock to some, but the person doing most of the talking during a performance review should be… The person getting reviewed. It’s the only way to ensure the focus is solely on the employee and their needs, and the accountability for their career progression sit firmly on their shoulders. We’re not saying managers should be silent partners, far from it. But their participation should be focused on three main areas: guiding the discussion by asking key questions, actively listening to their staff member and summarising the conversation and follow-up actions at the end.

Mistake 9: Not being clear on what you are evaluating

Before you go in, ask yourself one key question: what does good look like within your organisation? This will ensure you set a clear definition of performance for the role you are reviewing. After all, the skills required of a successful customer advisor will be very different from the skills expected of an accountant within your finance team. Create and share an accurate definition of performance for the role you are reviewing, as well a key metrics in place with which to measure progress over the next twelve months. 

But whilst role descriptions are a great place to start to both review objectives and set new ones for the year ahead, make sure you don’t put people in boxes. Get to know what makes them tick and create something that will fit their particular strengths, skillsets and ambitions. Don’t do beige and just pick an off-the-shelf role description.

Mistake 10: Not following up

Once the appraisal is done and your forms are filed away, it’s time to relax. Right? Wrong! Year-end appraisals should generate goals and action plans for the year ahead. Which need to be either implemented by managers, or at least monitored to ensure they are moving in the right direction. A lot of the accountability for taking charge of their own career development should fall on the individuals. But they may need a little help from their manager.

So during your regular check-ins with your team member, do review objectives and their KPIs, and ensure you give employees the support they need to be able to follow through and deliver their end of the bargain.

Whilst formal performance management reviews do get a bit of bad press, at Let’s Talk Talent, we believe they can be turned a hugely motivational process for your team. It’s all about finding the right balance between the process in place, the needs of the individual you are reviewing and the managers that will be guiding them through the next twelve months with you. Just remember there is no magic formula that applies to every business. Good performance management is about finding what works for your specific organisational context, so don’t be scared of experimenting with different approaches. As long as you are fully focused on helping people grow and unlock their full potential, you can’t really go wrong.

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