Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Performance review: these two words evoke mixed feelings in managers and employees alike. Some might be excited. Others become intimidated. But most managers feel stressed, because giving constructive performance feedback is a tough task.
You have to walk the fine line between coaching and criticizing. It’s easy to slip into the wrong territory. You can avoid this scenario with our tips, examples and a downloadable performance review template.
Featured Partners
Advertisem*nt
1
OnPay
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month + $6 per user
2
SurePayroll
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$29.99/mo plus $5 per employee
3
Gusto
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month plus $6 per user
4
Rippling
Benefits administration
Yes
Contractor Payments
Yes
Base Price
$35/month plus $8 PEPM
5
Justworks
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$50/month + $8/user
What Is a Performance Review?
Performance review is a systematic process of evaluating the employee’s past performance and articulating future expectations for the job. The purpose of reviews is twofold: Give constructive feedback and suggest the next steps for personal and professional development:
- Managers use performance feedback to motivate employees, prioritize career development opportunities and clarify responsibilities and accountability.
- Employees use performance feedback as a beacon. It helps them reorient their effort toward the right goals and moderate their behaviors accordingly.
Numerous psychological studies suggest that regular, fair and diverse feedback leads to substantial improvements in employee performance. Separately, workplace research suggests that meaningful feedback improves employee engagement levels and prevents talent attrition. But to capture these benefits, you must schedule regular performance reviews for each team member (typically once or twice per year).
How To Prepare for a Performance Review
Performance review is a dialogue between the feedback recipient and the giver. To have an impactful conversation, both parties should take the time to prepare their assessments, examples and commentary.
Without the lead-up work, a performance review session will lack substance and fail to deliver on its core objective—promote desired employee behaviors.
As a Manager
- Review the past goals and track key performance indicators (KPIs): Use available metrics to make an objective evaluation of the employee’s work.
- Analyze outcomes, not outputs: Focus on the employee’s positive contributions to the company rather than how many hours or efforts they have put in.
- Talk to colleagues: Request additional feedback from the recipient’s peers or other line managers who they’ve interacted with if you have doubts.
- Set personal biases aside: Try to cleanse your judgment from common unconscious biases, such as the “halo effect,” “conformity bias,” “affinity bias” and possible -isms.
As an Employee
- Collect and prepare evidence of your performance: These can include notable accomplishments, aggregated KPIs, feedback and praise from colleagues and superiors.
- Think about your career goals: What would you like to accomplish next? Which career development paths sound appealing to you? Do consider both vertical and horizontal career growth opportunities.
- Prepare to provide feedback too: Your employer would be interested in hearing what else the company can do to support your performance.
- Complete the provided self-assessment form: Answer the questions honestly. Avoid inflating your personal ratings as this would put you in an awkward position.
What To Write in a Performance Review
Performance review offers an opportunity to speak about the person’s strengths and weaknesses candidly. There’s a fine line between being helpful and overly critical. Less than 20% of United States employees agree that they’ve received meaningful feedback in the last week.
Performance reviews include an evaluation of an employee’s accomplishments, along with a data-based assessment of their strengths, weaknesses and areas for improvement. Effective feedback doesn’t condemn. It guides the employer toward doing better next time.
To provide feedback in a growth-encouraging way, try to phrase your statements in the following way.
Tie your improvement suggestion to past action. Instead of telling the employee to fully change their behavior, indicate how they improve upon past actions. For example:
Don't | Do |
---|---|
Your data visualizations weren’t great and you should do better next time. | I liked how you brought up data from Power BI [business intelligence] in your presentation. But next time, do spend more time visualizing it. |
Put fallout into context. To better articulate the need for change, explain the downstream effects of the employee’s behavior on the team, company and their own career prospects.
Don't | Do |
---|---|
Your inability to submit new interface layouts on time was rather unfortunate. | Your delay with the new interface layouts has led to a delay in the new website release. The development team couldn’t switch to other tasks because they were waiting up on you—and this also affected timelines on other projects. |
Use positive reinforcement. Promote repeat behaviors through appraisal. Acknowledge the person’s strengths and explain how to succeed further—not just avoid failure.
Don't | Do |
---|---|
You’re definitely good with customer service, but still this doesn’t fully compensate for the lack of qualifications in social selling. | Customer service is your definite strength. If you work further on improving your sales demo techniques, I can see you moving up to the Lead position. |
When writing your review feedback, think like a coach—and talk like a mentor.
After the Performance Review: Follow Up
Performance review is a corrective tool. However, to result in meaningful change, it should be paired with supplementary action on goal-setting and progress tracking. Design an accountability mechanism to promote continuous improvements.
Research on performance management suggests that people set higher goals under the condition of accountability. They’re also more likely to perform better when held publicly accountable, such as the goals known by the manager.
Instead of merely expressing praise and constructive criticism, set up a process for follow-up action. It can be documented either as an employee development plan or a performance improvement plan (PIP).
Employee Development Plan
An employee development plan―also called an employee growth plan―provides workers with a sequential list of tasks they must complete to improve skills and acquire knowledge for new roles.
Show the employee what actions they should take in the future to accomplish a certain goal—get a raise, advance to a new role, secure new responsibilities, and more. Doing so helps retain ambitious talent, improve overall employee engagement rates and perform succession planning.
Here’s what to include in an employee development plan:
- Career development prospects: Outline the possible paths and actions required to move to a C-level position.
- Extra training and upskilling: Include a list of suggested programs, certifications or educational courses needed to advance in their role or get considered for a promotion.
- New responsibilities and duties: Suggest how an employee can make a bigger contribution to the company by taking ownership of new initiatives, such as new enterprise resource planning (ERP) system rollout, or allocating extra time to new duties like mentorship).
A full employee development plan sits at the nexus of your company’s organizational needs and employees’ strong sides.
Performance Improvement Plan
A performance improvement plan (PIP) documents the employee’s current shortcomings and outlines corrective steps. A PIP can comment on poor performance ratings, address skill gaps, draw attention to inappropriate past actions—and suggest mandatory follow-up steps.
Unlike an employee development plan, a PIP is designed to address past failures or problematic on-the-job behaviors rather than set the backdrop for future successes.
What to include in a performance improvement plan:
- Acceptable performance criteria: Outline general expectations around the employee’s on-the-job performance with examples of positive/negative actions.
- Specific KPIs: Present a baseline set of quantifiable goals an employer must meet within the stated period.
- Support resources: Explain how your organization will help them address current shortcomings, such as mandatory training, mentorship and counseling.
- Check-in schedule: State how often you’ll provide feedback and set up recurring meetings.
- Consequences: Describe what will happen if the employee doesn’t comply with the proposed plan.
If an employee fails to follow the PIP, punitive action may be taken, such as transfer, demotion or termination.
Free Performance Review Template
Use this performance review template to create an evidence-based approach for evaluating employee competencies and on-the-job behaviors.
Download Free Performance Review Template PDF
Performance Review Do's and Don'ts
The ultimate goal of the performance review is to guide, not admonish, your team members. Your feedback should help the receiver practice the right actions and make them feel recognized for their achievements.
To ensure your feedback achieves the above goals, use the following techniques:
Instead of: | Try this: |
---|---|
“Jumping straight to performance scores” | “Convey a positive intent” |
“Acting on a hunch” | “Rely on quantifiable data” |
“Passive-aggressive statement” | “Constructive criticism” |
“Emphasizing relationships” | “Highlight achievements” |
“Suggesting fixes” | “Indicate areas of improvement” |
“Making a blanket statement” | “Describe your observations in detail” |
“Commenting on actions or behaviors” | “Comment on the impacts made” |
“Keeping the conversation one-way” | “Provide an opportunity to respond” |
When To Use Performance Review Software
Performance review software offers a consolidated set of tools and storage for governing employee evaluation processes. Such platforms help you create standardized performance evaluation forms, process feedback and manage review schedules with the managers.
Best-in-class performance review software also promotes a good governance model by making the review process standardized, transparent and cross-attributable. A strong methodology, paired with data traceability, prevents personal biases from affecting evaluations—and protects your organization against discriminatory accusations.
Bottom Line
Regular feedback and coaching are crucial for nurturing an engaged workforce. A documented performance review process is your first step toward creating a more productive work environment where A-level work is regularly acknowledged and temporary performance slips get resolved fast.
Featured Partners
Advertisem*nt
1
OnPay
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month + $6 per user
2
SurePayroll
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$29.99/mo plus $5 per employee
3
Gusto
Benefits administration
Yes
Contractor payments
Yes
Base monthly price
$40 per month plus $6 per user
4
Rippling
Benefits administration
Yes
Contractor Payments
Yes
Base Price
$35/month plus $8 PEPM
5
Justworks
Benefits Administration
Yes
Contractor Payments
Yes
Base Price
$50/month + $8/user
Frequently Asked Questions (FAQs)
How often should you conduct a performance review?
Conducting performance reviews every 6-12 months is the standard practice. Initiate performance for new and entry-level candidates sooner, such as after three and six months, as part of their onboarding. Schedule reviews of other team members less regularly (unless there are issues with their performance).
What should I say in a performance review?
An easy way to figure out what to say in a performance review is to mentally divide your speech into three parts:
- Recognition of the person’s efforts and accomplishments.
- Constructive feedback on the person’s actions and behaviors.
- Outcomes and follow-up steps after the performance review.
Ensure the receiver understands what’s going to happen next and has clear takeaways from the conversation.
What are the 5 performance ratings?
Most managers use a five-point grading system for evaluating employees’ performance across set criteria. The standard 5 performance ratings are:
- 5 (Outstanding)
- 4 (Exceeds Expectations)
- 3 (Meets Expectations)
- 2 (Needs Improvement)
- 1 (Unacceptable)
What are the components of a performance review?
The main parts of a performance review are:
- Performance review form or scoreboard for managers
- Self-assessment form for employees
- 1:1 conversation with the direct supervisor
- Employee development plan
- Performance improvement plan