The top 10 performance management review mistakes you’re probably making

How to use year-end appraisals to generate motivation

A new year is always synonymous with year-end reviews and brand-new personal development plans. However, despite putting a lot of effort into their performance management processes, many businesses struggle to turn them into effective motivational tools. In fact, 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. Not quite. Sitting down with staff to recognise their contribution is never a bad thing.

At Let’s Talk Talent, we believe there are ways to transform formal appraisals into positive experiences that generate growth and benefit both the organisation and its people. Or as we like to say, less of the stick, more of the carrot. To help you do this, here is a quick list of the top 10 mistakes to avoid during formal appraisals. 

1st performance review mistake: Not being prepared enough

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

2nd performance review mistake: Avoiding the negative feedback

Many managers do not feel confident enough to have difficult conversations. But for growth to happen, there needs to be an honest discussion about the skill gaps your team members need to fill to be able to progress to the next stage of their career. However, 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 some coaching to increase your confidence. Techniques such as role play can give you the tools to support employees and help them learn from their mistakes, and strive to overcome them. Remember that good managers will set the bar high, but also provide the necessary support to reach objectives.

Have a look at our performance management whitepaper for tips on how to handle difficult conversations.

3rd performance review mistake: Not being focused enough

For most people, a formal review is a nerve-racking experience. Add to this the crushing feeling of having spent time preparing a list of important points to discuss with  your manager, only to see them checking their phone or replying to emails. Annual reviews are all about recognising the contribution someone has made to the organisation throughout the year. It’s important to give them the time, focus and attention they deserve.

Ensure you have allocated enough time to the meeting 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.

4th performance review mistake: 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 important 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 preventing them from being fully receptive. When preparing your notes, make sure you leave any new feedback item out. You can handle those as part of a separate meeting.

5th performance review mistake: Not reviewing the whole year

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

6th performance review mistake: Bundling appraisals and pay discussions together

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 several external elements, 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 the factors at play, and what they can actually influence by working on the skills, knowledge and behaviours that make up their contribution.

7th performance review mistake: Focusing on the process, not the individual

The purpose of year-end reviews is clear: to recognise your people’s contribution and to set them up for the next twelve months. It bears repeating, as it’s easy to lose sight of this and just go through the motions. 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, don’t hesitate to adapt your approach to find out what works best for your people. Use this opportunity and take the time to truly get to know your team. Learn about their skills, their knowledge and their behaviours so that together, you can set stretching objectives in line with their career development goals.

8th performance review mistake: 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 whose performance is getting reviewed. It’s the only way to ensure the spotlight is solely on the employee and their needs, and the accountability for their career progression sits firmly on their shoulders.

We’re not saying managers should be silent, far from it. But their participation should be focused on: guiding the discussion by asking key questions, actively listening to the other person and summarising the conversation and the follow-up actions at the end.

9th performance review mistake: 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 those expected of an accountant within your finance team. Create and share an accurate definition of performance for the role you are reviewing, and put key metrics in place so you can measure progress over the next twelve months. Have a look at our ultimate list of HR metrics for some ideas. 

It’s important to note that whilst role descriptions are a great place to start to 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, skill sets and ambitions. Don’t do beige and just pick an off the shelf role description.

10th performance review mistake: Not following up

Once the appraisal is done and your forms are submitted, it’s time to relax, right? Wrong! Year-end appraisals should generate goals for the year ahead, as well as an action plan to reach them. This should be facilitated by managers, or at the very least monitored, to ensure employees are moving in the right direction. Whilst most of the accountability for taking charge of their career development should fall on the individual’s shoulders, they may need a little help from their manager.

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

Whilst formal performance management reviews do get a bit of bad press, we believe they can be turned into hugely motivational tools for your people. It’s all about finding the right balance between the processes in place, the needs of the individuals whose performance you are reviewing, and the managers that will be guiding them during the next twelve months. 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 trying different approaches. As long as you are fully focused on helping people grow and unlock their full potential, you can’t really go wrong.

If you would like some help in setting up or reviewing your performance management processes, do not hesitate to book a call with our team.