Performance reviews are a great way to boost employee engagement, motivate your team, and meet your business goals. But it’s important to get them right — and according to the data, managers are missing the mark more often than you might think. 

A recent survey by management consulting agency McKinsey and Company revealed that more than half of employees don’t think their managers conduct performance reviews properly. Even further, a Gallup study found that only one in five employees felt motivated by their organization’s review processes. 

Instead of viewing the performance review time as simply a cursory routine or method of delivering compensation updates, make the most of them by using the process to help your team grow professionally. We’ve got the inside scoop on how to rethink your review process and boost your practices. 

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What is a performance review? 

Employee performance reviews consist of a process in which you as the manager evaluate the performance of your team members and provide feedback on their work. If done correctly, your employees should walk away from the review with a better understanding of: 

  • Your expectations 
  • What they’re doing well
  • How they’re supporting overall goals 
  • How they can improve

Most organizations hold review sessions twice a year to allow for more consistency in providing this feedback. They also use them to discuss the individual’s goals and how management can help them get there. 

Performance reviews should be a two-way conversation between you and your team member. A proper review should include preparation on both sides, so that both you and your employee can contribute equally. 

What does the performance review process include? 

The performance review process typically includes three stages: 

1. Goal setting

The first step usually happens at the beginning of the year and involves a discussion with your team members on their goals. Having this conversation before your review process allows you to set expectations and gives the employee clarity on what they should be working toward. 

2. Follow-up

Before the formal review process, you can meet with your team members to discuss their performance  against those goals and where they should consider improving. Some companies conduct these meetings regularly and provide feedback in writing, while others hold more informal discussions without any written documentation. 

3. Performance evaluation

The final step is a formal discussion of how the team member performed and if they met their goals. You’ll provide written feedback and discuss with the team member. After the conversation, you’ll set new goals for the next review period. 

Preparing for performance reviews is also a good time to assess your team’s workload. Are they at risk of experiencing burnout? Do they have enough time to take on more work and new opportunities? 

Luckily, Harvest is a powerful tool to use for reviewing your team’s capacity. With capacity reporting, you have an in-depth understanding of who’s overworked and under-utilized at a glance — so you and your team member can have a more productive conversation about optimizing their workflow. 

What to do before conducting reviews

Both you and your employees should prepare for the performance review ahead of time with organized notes and talking points. A few things you can gather to make the most informed conclusions include: 

  • Documentation from past reviews including previously set goals and notes from prior conversations 
  • Feedback from colleagues on the employee’s performance 
  • Performance data 
  • Customer feedback if applicable 
  • SWOT analysis, or an analysis of their strengths, weaknesses, opportunities, and threats. 

It’s also a good idea to establish a shared agenda so you can set the tone for a positive, constructive meeting. Many employees feel like reviews are really an interrogation, so providing the agenda ahead of time will highlight that it’s actually a conversation about growth and motivate them to be more open during the review. 

And to help reinforce the idea of an open conversation, you can also ask your team members to share topics they’d like to cover before the review. This way they’ll get the most value out of the session — and know you’re ready to listen to their thoughts. 

Using a formalized review template 

To conduct a formal review, you’ll need two forms: one you fill out with your team member’s performance in mind, and one they will complete as a self-assessment. Both of you will bring the forms to the review session and use them to facilitate the conversation. To get started, you can use our free employee review template and customize it to suit your needs. 

Helpful tips for during the review process

It’s critical to ensure that the performance review process is as positive as possible. Use the tips below to help create a culture of motivation and growth for your team. 

Speak clearly, ask the right questions 

Using the wrong phrases and evoking a sense of negativity will result in your team dreading each review period. Instead, focus on using positive language and emphasizing that the goal is to motivate your team to grow by pinpointing problems and finding solutions together. 

Doing this requires asking the right questions. Here are a few questions you can ask that will create an engagement environment and help create a path for improvement: 

  • What are your goals for the next six months? 
  • What are you most proud of from the last six months? 
  • Do you have any personal development goals? 
  • How can we work together to resolve any hurdles you’re experiencing? 
  • What can I do as a manager to improve? 

Focus on listening 

Like we mentioned before, performance reviews should be a two-way conversation — but that can often be easier said than done. However, if your team member feels like you’re the one doing all the talking, they might be reluctant to share information that could lead to positive growth. 

Make sure your team members know that you’re actively listening to any thoughts they share. Ask them questions that allow them to lead the conversation, and provide follow-up questions to dive deeper into topics they bring up. 

A great way to convey you’re listening to them is to repeat back what you heard, giving them an opportunity to clarify any misunderstandings. 

Provide specific examples

Criticism should never be generic during performance reviews — your team member will walk away from the conversation feeling frustrated and even confused. Be sure to provide concrete examples for not only areas of improvement but also moments of success. 

Using examples to provide feedback gives them more clarity and direction on how they can improve, and highlights that you’re paying attention to their achievements. This shows your team that their work hasn’t gone unnoticed. 

Track progress

Remember that the team member’s goals were set for a reason — and in order to assess their performance, you need to use measurable goals to evaluate their progress and understand if your reviews are making a difference. And as you review the goals before the next review period, ask yourself the following questions: 

  • Is there a positive progression? 
  • Has the employee improved, stayed steady, or declined? 
  • Has their morale changed? How so? 
  • Are they more confident than the last time we met? 

If you’re continuing to notice a lack of progression, it might be good to change the employee’s goals or take a different approach to help them grow professionally. 

What to do after the review 

The most important factor in employee performance reviews is to ensure the conversation doesn’t become pointless — after all, it’s just one step in the growth process.

Build an action plan 

Once the review is over, both you and your team member should thoughtfully review what was discussed. Look over the notes, create an action plan, and follow up on it regularly to ensure both parties are staying on track with the improvement process. 

Create an open-door policy 

Open conversations about performance and growth shouldn’t be exclusive to performance reviews. By creating an open-door policy and conveying to your team that they can have constructive discussions with you about their goals outside of these reviews, they’ll feel more comfortable bringing up any issues or roadblocks they experience before it’s time for another formal assessment, helping build a culture of continuous improvement.