How to Conduct Annual Reviews

An annual review can help you keep your employees happy, engaged, and focused.  It is human nature to want to succeed.  Giving your employees feedback on their positive and negative attributes is part of the pathway to success.  A poorly designed annual review can have the reverse effect.  In this module, we will discover how to conduct a well-designed employee annual review.

Develop the Process

A well-developed annual review process can help strengthen your employees and your company. Reviews help employees see their strengths and weaknesses, it is a great way to recognize them for their great work and let them know what needs to be improved.  Here are some ways to develop your annual review:

  • Put thought into your evaluation– You should decide what it is you are wanting to convey to your employee, what message you are wanting them to leave with.  Many times these evaluations are rushed, but your employees need to know that the evaluation is important, because they are important. 
  • Set categories– Decide what categories of the job are going to be included in the employee evaluation.
  • Set benchmarks for the categories selected– Take the time to decide what the benchmarks should be for the set categories.  Make sure to do research, the benchmarks should be realistic.
  • Location, location, location– Take the time to find a place that is private, and not too sterile.  You want the employee to be comfortable, and don’t want to have the whole office eavesdropping.
  • Have an agenda– Having an agenda helps relieve some anxieties an employee may be having about the review.  Your agenda should include:
    • Past Performances– What the employee’s performance was the previous year or years
    • Current Performance– What the employee’s current performance is.
    • Next Year’s Goals- What new goals or benchmarks you’d like the employee to meet.
    • Game plan- The plan that you are going to utilize in order for the employee to correct any problems, and meet the future set goals.
  • Have periodic reviews – You don’t want to go a whole year and have an employee suddenly find out they are not preforming to the best of their abilities.  You want to prepare them before an annual evaluation.  The best practice to facilitate this is to have periodic evaluations throughout the year.  This way, the employee can understand what they are doing correctly, and what needs work before their annual review.   These periodic evaluations help the employee to change whatever is prohibiting them from being the best they can be.  They also help you as a supervisor determine if additional training is necessary.
  • Decide the appropriate paperwork– Decide what paperwork you will need for the review.  This could include job descriptions, your periodic reviews, etc.
  • Get organized! – Make sure you have the employee’s records organized so that the annual review is not traumatic for the employee or reviewer.

Other little tips for your review process:

  • Get it together! – Make sure you have all of your paperwork ready before the meeting. No one likes their time wasted because someone was ill prepared. 
  • Get and give feedback- Give feedback to employee about the areas in which they are excelling and need work on, but also give them the opportunity to give you feedback on what you excel at and need to work on.  
  • Don’t be tardy! – When conducting employee evaluations, you should try to make sure you do it within a few weeks of their anniversary.  It is easy to get side tracked, but these evaluations are a priority!
  • Encourage self-reflection- Allow the employee to tell you what they think they do well, and what they think they need work on. It can help your employee learn the value of self-assessment, but also show them how much you value their opinions.
  • Encourage venting- Give the employee the opportunity to address any comments, concerns, or suggestions that they may have.  
  • Be straightforward with negative feedback- Give constructive criticism, it’s not always easy, but it will help everyone in the long run.

Set Benchmarks Early

It is important when you are preforming annul reviews, that the employees know what is expected of them.  Setting a benchmark is how you can show your employees what you and your company expect of them.  So what is a benchmark?  A benchmark is a baseline standard that you or your company sets for your employees.  A benchmark could mean that your employee has to have a certain quality of work, rate at which a function is processed, the number of units completed, or any combination of these. Employees should be aware of the benchmarks that are set, as soon as possible.  A great way to notify new employees of benchmarks is to include them in the orientation or initial training.  Keep in mind though, that there is lot of information given to employees during orientation / initial training, so it’s advisable to periodically remind your employees of the standards they are expected to meet.

Agreement with Set Benchmarks

Now that you understand what a benchmark is, you can determine appropriate benchmarks to set.  It is important when setting your benchmarks that you, your company, and employees feel like they are reasonable benchmarks.  Your company wants to have optimal productivity, so the benchmark needs to be high enough to facilitate the minimum standards of the company’s expected productivity.  Employees need to feel like it’s not impossible to meet the standard, setting the benchmark too high can make employees feel insecure, underappreciated, and cause job dissatisfaction.  So how can you make sure everyone is in agreement with the benchmarks?  There are several ways to do this, however the most successful is a committee.  Forming a committee of employee representatives and upper management can help you make sure that everyone is onboard with the benchmarks.  Keep in mind when you are setting these benchmarks that they are meant to be a baseline standard, and the goal is for employees to meet and surpass the benchmark.

Hold an Effective Meeting

Meetings are imperative to any supervisor and employee relationship.  Meetings are the venue to notify employees of new benchmarks, policies, procedures, and to show recognition.  While meetings are standard in almost every company, a lot of supervisors have problems holding an effective meeting. Here are the do’s and don’ts to aid in having an effective employee meeting.

  • Have a clear purpose. Identify the reason for the meeting, and stay on track.  An awesome way to make your purpose clear is to include an agenda.  An agenda helps keep you on track, and makes sure that everything needed to be discussed is addressed.  It is easy to go off on a tangent and forget to discuss other pressing business, so stick to the agenda!!  Agendas also help attendees remember what was addressed at the meeting.  
  • Invite the appropriate staff. When you are going to have a meeting, make sure your attendees really need to be there.  You don’t want to have a meeting about one particular department and require the whole company to attend.  Just as you don’t like to have your time wasted, neither do your employees, so be respectful.
  • Keep it short!  No one wants to be stuck in a meeting for hours on end.  Hit your points, make sure there aren’t any questions, and move on!  
  • Be punctual.  A meeting needs to have a start time and an ending time.  Be sure to stick with the schedule.  Going over on a meeting causes your employees to quit listening to you and start focusing on the clock instead.  
  • No distractions.  It’s a great idea to outlaw technology in a meeting.  Having one of these devices in a meeting can turn an employee’s attention from you to their device.  If they aren’t going to pay attention, what is the point of the meeting?
  • Any questions?  Not everyone is comfortable asking questions in front of a group.  Save a little time at the end for people to personally come up to you and ask questions.  This allows the employee to voice any questions they may have about the material shared, and feel safe doing so.

Case Study

Ursula is a new employee at the Preppy Bean coffee company.  She was very excited to get this job, she has heard it is a great place to work.  She works in the customer service department, which deals mostly with receiving and entering orders, and handling customer complaints.  Walter is the supervisor of the department.  His employees respect him a lot because he always tells them their strengths and weaknesses when it comes to job performance.  He gives regular evaluations, annual employee reviews, and knows the benefit of retraining when necessary.  Ursula has heard so much positive feedback about her new boss Walter, and has had the opportunity to receive feedback from him as well.  He has expressed to her on numerous occasions how much of an asset he feels like she is to the company.  When he gives her criticism, it is constructive and he always has a solution to the problem.  Because of all of the positive feedback, Ursula has no problem voicing her questions or concerns.