Performance reviews are critical for both employee and organizational success, but it can be hard to see their value when you’re in the thick of it; they take a lot of time, and sometimes require difficult or uncomfortable conversations between a manager and an employee. Establishing the right environment to give and receive feedback, regardless whether it’s positive or negative, can go a long way in making sure performance review conversations are productive, effective, and actionable. 

Why Performance Reviews Are Important

Managers spend 210 hours a year (that’s over 26 work days) on performance management, and performance reviews measure if that time is well spent. 

If you’re tempted to save some time by ditching reviews altogether, there’s data that suggests this may not be the most strategic decision. According to a 2016 Gartner study of companies that eliminated performance reviews:

  • The quality of conversations between managers and employees decreased 14%.
  • Overall employee performance decreased by 10%.

After all, as the name implies, performance reviews drive performance.

Reviews are necessary for setting goals and expectations and reflecting back on past performance — all of which are essential for fostering employee development. Think of it like this: Performance reviews are like going to the gym — you might drag your feet getting there and it may be uncomfortable in the moment, but the practice can help you stay healthy in the long run.

It’s the responsibility of People professionals to champion the importance of reviews and implement a company-wide understanding that feedback culture matters. Not only does feedback make a company and its people successful, but it also leads to alignment, a vibrant and healthy organizational culture, and employee growth.

Establishing the Right Environment

Framing a performance review as an opportunity for transformation and growth, instead of seeing it as a dreaded task you have to complete, can make or break the conversation. Preparation and mindset are key — what you bring into it is going to determine what you get out of it. Both parties should be open to receiving constructive feedback in a non-defensive way, but also set their own boundaries. For example, you should be willing to listen to feedback that helps you be a better performer, but not allow harsh personal criticisms or abusive behavior.

Here are some tips for both managers and employees that will help set the tone for a successful and productive performance review for both parties.

For Managers

Being a great manager means you need to be a great people person. And being a strong individual contributor, even if you’re at the top of your craft as an IC, doesn’t automatically make you a great manager. Managing requires different skills, and the ability to motivate people to perform at their best in the workplace and set high standards without alienating people. But don’t worry if you don’t already have these skills — they can be learned and improved. While there may not be a lot of classes you can take on the subject, you can learn people skills through different relationships over time, whether they be with family members, friends, or mentors. Some performance review preparation tips for managers include the following:

  • Eliminate feedback surprises. Provide continuous feedback throughout the year. Delivering feedback as you see issues or achievements arise in real time will be more effective than saving it all for the end of the year. If an employee is hearing specific feedback for the first time during a performance review, you’re probably delivering that information too late. In worst case scenarios, people are getting fired and are blindsided by the news and unclear about the reasons why. Even if you delay giving feedback, it’s better late than never. Holding in feedback can be detrimental to managers, too. By storing up the information, especially if it’s negative, it may not be delivered in the most constructive way.  
  • Provide tangible examples. In a personal context, most of us aren’t writing down things we see in others’ behavior in order to report it back to them. But in a professional setting, it’s effective to cite specifics.
  • Identify key themes in feedback. Find commonalities in your feedback so employees have focus areas, instead of trying to address a lot of different things all at once. 

For Employees

Here are some tips employees can use when preparing for their performance reviews:

  • Reread your self-review. Prepare ahead of time by going over what you’ve written about your accomplishments and opportunities for improvement. 
  • Have a story to tell. Control your own narrative instead of letting someone control it for you. Reflect on what you’ve done in the past review cycle and help it guide you to where you want to go.
  • Know your successes. You are your own best advocate, so there’s no one better to sell your wins, and how you achieved them, than you.

Performance reviews are a great forum for employees to give their managers feedback, too; it should be a two-way dialogue. In addition to talking about the employee and manager as individuals, take time to discuss the relationship as well, which is its own entity that requires both people to develop together.

Creating a Feedback Culture

One way to think about how people can become high performers is to use a “love/structure” framework. On the love side, you have empathy, connection, and positivity. On the structure side, you have expectations and boundaries. In order to be a functional person and employee, you need both.

For example, companies with low love and low structure have a lot of churn because not only is there a lack of positive feedback, but there are unclear goals and targets. Companies with low love and high structure have high expectations but often use negative feedback; this could be fine when everything is going well, but as soon as company performance takes a dip, you’ll see employees leave. Companies with high love and low structure, while they have positive environments, can cause employees to feel lost or be unclear about what they’re being measured against in the absence of set expectations.

High love, high structure is where you want to be from an organizational culture perspective. These companies tend to retain employees through thick and thin because people are happier, and they also tend to see high performance because the right structures (such as performance reviews) are in place. 

Giving and Receiving Positive Feedback

It may seem easy to say positive things about someone, but there’s actually an art to it. Here are three components of giving and receiving positive feedback:

Active Listening

Active listening is the most imperative foundation for any manager. Going into a review conversation, you have to be prepared to listen. You have two ears and one mouth, so the ratio of 2:1 should be used for when you’re listening versus talking. Active listening involves listening to another person and taking in what they’re saying, but also repeating back the key points to them in a way that shows you heard them.

Giving Positive Feedback

Begin review conversations with positive feedback to create psychological safety (and practice if you’re uncomfortable giving it so it starts to feel more natural). Additionally, you’ll want to:

  • Give positive feedback equal weight as constructive criticism.
  • Emphasize behaviors, not outcomes.

Receiving Positive Feedback

It can be difficult for someone to take in positive feedback, too. Take a breath, say “Thank you,” and follow up with questions like:

  • Can you elaborate more on my strengths in that situation?
  • What is something you would like to continue to see me doing?
  • In your eyes, how could this be improved more?

Giving and Receiving Negative Feedback

Feedback is a gift. Positive feedback feels good, but critical feedback can be more useful for growth and improvement, even if it’s difficult to receive and give. As a manager or a coworker, you should consider feedback as an obligation to others; it’s a mutual understanding that you’re going to help each other grow. If you work with someone closely every day, you’re in the position of being able to provide useful feedback, and if you don’t do it, no one will. Say what you see and what you think is helpful. Even imperfect critical feedback is better than no feedback. Here is some essential advice you’ll want to consider when giving or receiving negative feedback:

Giving Negative Feedback

In a negative feedback situation, you’re trying to manage defensiveness. If you’re the manager, frame your feedback in ways to elicit less defensiveness, and manage your own emotions so it comes out in a moderated tone. Some things to keep in mind:

  • Be specific.
  • Focus on the person’s behaviors and how they make you feel versus your interpretation of the intention behind their behavior. For example, use statements that begin with “I feel.”
  • Avoid hyperbole.

Receiving Negative Feedback

If you’re on the receiving end of negative feedback, listen to understand and respond instead of listening to react. First and foremost, manage your own psychological reactions and emotions. Additionally, it’s helpful to:

  • View it as an opportunity to grow. 
  • Establish boundaries (e.g., setting a clear expectation of what you want)
  • Ask clarifying questions. 

Finally, dig into the discrepancies. If you notice any areas where you ranked yourself significantly higher or lower than your manager or colleagues ranked you, this can help you identify blind spots and opportunities for improvement. 

Negative feedback is important, but it has to be delivered in the right way in order to inspire the right action. Companies should set leadership standards that don’t tolerate toxicity (e.g., personal criticism, attacks, passive aggression) and importantly, hold people accountable who exhibit that kind of bad behavior.   

It’s crucial to communicate that it’s okay for employees to fail or work on hard things. If we never try projects or tasks we’re not sure we can do, we won’t stretch or grow. Creating a safe space for trial and error can help people feel more comfortable with critical feedback, as well as flip failure into an ambitious way to grow.

Creating a Follow-Up Plan

After the performance review, now what? You need to create a follow-up plan to address any feedback — otherwise, there was no point in doing the performance review in the first place.

For Employees: Follow-up on any peer reviews in person through informal one-on-ones. This can help contextualize feedback, and get additional details that may not have been relayed in written form. 

For Managers: Recap the whole review in digestible chunks. There might have been a lot of content, so a manager should summarize it at a high level.

For Both: Identify two to three areas of improvement and create a follow-up plan. The plan should include what the action items are and what specific areas to focus on.

Key Takeaways

  • Productive feedback conversations require active listening. Hear what the other person says, repeat it back in a thoughtful way, and establish you understood the other person before responding.
  • Give equal weight to positive and negative feedback, and don’t just give one or the other. Equip employees with the ability to give and receive both types of feedback. You don’t have to choose one or the other — positive and negative feedback are not mutually exclusive.
  • Create a follow-up plan after performance review conversations and hold managers accountable to seeing them through.

This article is based on information and insights from our popular webinar, “Mastering the Performance Review Conversation.” To learn more and explore this topic in greater depth, you can view the full webinar here