6 Key Steps to Prepare Your Annual Performance Reviews

The annual performance review isn’t just a formality; it’s one of the most powerful levers HR has to boost engagement, performance, and retention. It’s also a time to look back on achievements, establish goals for the year ahead, and strengthen the relationship between employees and their managers. 

But while managers focus on one-to-one discussions, HR plays a strategic role designing the performance review process, ensuring compliance, training managers, monitoring progress, and analyzing the results. 

So how can HR teams make performance reviews more impactful and less of a burden? Let’s explore how to structure annual reviews in 2026 for maximum engagement and efficiency. 

The 6 Key Steps to Prepare Your Annual Performance Reviews 

1. Ensure legal compliance: Check contractual obligations, internal policies, and consultation procedures.
2. Plan the campaign: Set an advance schedule, select digital tools, and design structured templates.
3. Train and equip managers: Provide preparation kits, communication tips, and guidance for sensitive discussions.
4. Optimizing the evaluation: Use self-assessments, 360° feedback, and historical performance data.
5. Anticipate current challenges: Remote work, well-being, cost of living, and organizational change.
6. Monitor and analyze results: Track progress in real time and consolidate data post-review.

Ensuring Legal and Regulatory Compliance in Performance Reviews 

Before launching your annual performance review cycle, it is important to determine if your process complies with company rules or regulations. In most countries, performance reviews are not mandatory by law. They may, however, be required depending on your circumstances : 

• A collective bargaining or company agreement requires them 

• Employees are on a fixed daily rate, where the review monitors workload 

• Management has formalized an performance review policy 

To remain compliant, adopt the following practices:  

• Invite all employees as missing one can expose your company to discrimination risks 

• Avoid stressful or intrusive evaluation methods 

• Keep all questions strictly professional and objective 

• Notify employees 10–15 days in advance, specifying the date, time, and topics 

Planning and Organizing an Effective Annual Performance Review

Plan early  

For large organizations, start preparing six months in advance to coordinate budget reviews and avoid busy periods.  

As we mentioned, remember to check the legal deadlines if certain reviews are mandatory, such as for employees on a fixed daily rate. Launching your performance review cycle in September or October ensures enough time to manage unforeseen delays.  

Choose the right tool 

Say goodbye to spreadsheets. A dedicated performance review solution will allow HR teams to save time, reduce errors, and improve insight into employee performance.  

With the right tool, you can: 

• Automate invitations and reminders 

• Track and monitor progress in real time 

• Access previous reviews and reports 

• Centralize goals and outcomes 

When using a dedicated solution, ROI kicks in fast. HR teams instantly save hours of admin work, avoid costly mistakes, and gain better visibility over the entire performance review process. At the same time, HR can provide employees with a more streamlined and positive experience. 

No more chasing people down or struggling with endless Excel sheets that never stay up to date. With Skillup's Performance Review module, everything is brought together in one place, from planning review cycles to analyzing the results, making performance management easier, faster, and far more effective.

💡 Yzico automates its performance reviews, saving HR teams up to 80% of their time

To modernize its talent management, the accounting firm Yzico (500 employees, 24 branches) adopted Skillup's Performance Review module. 

Before Skillup, performance review cycles were tracked manually using Excel spreadsheets. As a result, 80% of HR’s time was spent on follow-ups and data consolidation. In just three months, Yzico was able deploy Skillup and automate it's entire process. 

The result: 

• Real-time campaign management
• 100% online reports and signatures
• Autonomous managers and reliable monitoring

Prepare structured review template  

A well-structured annual performance review template is often the foundation of a fair and effective evaluation. By organizing discussions by topic, you help managers stay objective and ensure every employee gets a consistent, high-quality experience.

There are two reasons for this. 

1. Reduce memory bias.
   Managers naturally recall recent events more easily, a phenomenon known as “recency bias.” If an employee underperformed in the last quarter, that can unfairly color the entire evaluation. Structuring the discussion around clear sections (past objectives, achievements, skills applied, and development projects) helps maintain a balanced and evidence-based evaluation.
2. Integrate well-being and context
   Performance should never be assessed in isolation. Consider external and human factors such as well-being, workload, or organizational changes. Studies consistently show that well-being directly impacts performance and engagement.

To make your templates even more relevant, customize them by role and seniority. A sales representative will not have the same challenges as a training manager during their evaluation. 

Also, alternate between open-ended and closed-ended questions. Open-ended questions allow employees to express their feelings, difficulties, needs, and expectations. Closed-ended questions are more useful for gathering specific information, such as desired training or skill development needs. 

A clear, structured template turns the annual performance reviews into a focused, constructive, and motivating conversation for employees and managers.  

Supporting Managers during Annual Performance Review Cycles 

Promoting best practices  

Not all managers are naturally comfortable with conducting annual performance reviews. Some dread difficult conversations, while others tend to monopolize the conversation or let emotions get the better of them. That's why it is essential to train them ahead of the review season. 

Start by providing them with a comprehensive preparation kit. In practical terms, managers should take the time to carefully review the results of previous years' performance reviews, as well as activity reports, performance indicator history, and any other reports concerning the employee. 

Additionally, encourage managers and employees to approach the annual performance review with the right kind of attitude. The employee must be an active participant during the review. This is an opportunity for them to express their overall feelings, their integration into the team, their workload, and their motivations. 

To ensure a constructive exchange, managers should listen actively, highlight all the positive points, and encourage their employees. If there are negative points to mention during the evaluation, they must be able to offer objective advice and appropriate solutions. Establishing a climate of trust during any performance review reassures employees and reinforces their commitment. 

Anticipate challenges

Annual performance reviews are also a time when employees express their requests: salary increases, switching to part-time work, remote working, internal mobility, training, etc. To prevent your managers from being caught off guard, prepare responses with them in advance. What is the company's policy on hybrid remote working? What budgets are available for training? What internal mobility options are available? 

64% of employees think it is important to evaluate performance during their annual evaluation (Skillup x OpinionWay 2024 survey).  

It is equally important to pay close attention to struggling employees who are underperforming, unmotivated, or experience conflicts with other team members.  

Performance reviews can be tricky to conduct in these situations. Help your managers figure out the right approach by remaining factual, identifying the root causes, and suggesting a concrete action plan. Sometimes, extra HR support or mediation will be needed after the one-on-one meeting. 

Optimize Your Performance Review Cycle

Encourage self-assessment 

Why not invite employees to take an active role in their evaluations? The reason performance reviews get a bad rap is because they feel like a parent-teacher conference. Employees adopt a passive attitude and wait to see whether they have been good students or not during their end-of-year review. For this reason, self-assessment is a powerful lever for engagement. The idea? Employees take the time to assess their objectives and skills and reflect on their professional aspirations before individual reviews. 

This practice empowers your employees and enriches the discussion during the performance review. This gives managers more information to fully understand the issues facing their direct reports and provide them with a more personalized response.  

To make self-assessment effective, send it out well in advance (at least one week before the review), provide a clear framework with specific questions, and encourage reflection without overloading the form. 

Integrating 360° feedback 

On a daily basis, employees interact and work with other people including other colleagues, service providers, and internal clients. Furthermore, line managers may not necessarily be the person who spends the most time with their team, particularly since remote working has become more widespread. 

Peer assessment, also known as 360° feedback, allows managers to consult the employee's professional circle (direct or indirect) to measure and evaluate their performance over a given period during the performance review process. Feedback from these individuals regarding their skills, collaboration, and performance is very useful for objectively evaluating the employee. 

For managers, this practice is beneficial because it provides a comprehensive view of their direct reports' performance, allowing them to evaluate them more accurately during performance reviews. By gathering multiple pieces of feedback, you can avoid certain unconscious cognitive biases that lead to favoritism or inflexibility. 

On the employee side, peer feedback encourages them to become aware of their strengths and areas for improvement. On the day of the evaluation, they are therefore more willing to hear positive and negative comments from their line manager and to be open to solutions. 

In practical terms, integrate 360° feedback directly into your performance review management tool: identify 3 to 5 relevant evaluators, guarantee the anonymity of the feedback, and summarize the feedback for the manager before the end-of-year review. 

Analyze historical data 

Before each annual performance review, managers must have easy access to the employee's history. Provide dashboards showing each employee’s objectives, training history, and past feedback. This long-term view helps identify trends, recognize progress, and flag risks early. 

Addressing Today’s HR Challenges 

The annual performance review is not just about evaluating past performance and setting new goals. It is also an ideal opportunity to address employees' current concerns. At a time when companies are struggling to retain employees, these expectations need to be put on the table during any review or evaluation.  

Remote work and flexibility 

Recent studies reveals that hybrid work remains the most common arrangement (44%) for EU employees in roles that can be performance remotely. Moreover, according to Eurofound's report Living and Working in the EU, shows that 31% of employees want to work from home several times a week.

These figures speak for themselves: flexibility and quality of life at work (QLW) are now decisive criteria. During the annual performance review cycle, prepare your managers to address these issues openly. What is the company's policy on hybrid remote working? What arrangements are possible? These issues must be clarified in advance with senior management so that managers can provide consistent answers.   

Purchasing power 

Inflation is a concern for employees. While pay raises are not always possible, what alternatives can you offer? Special bonuses, benefits in kind, contribution to transportation costs? Anticipate these requests and provide your managers with key messages to communicate during performance reviews. 

Organizational transformation 

Finally, if your company is undergoing organizational transformation (restructuring, merger, digitalization), this change can disrupt the functioning and performance of teams. An annual performance review is the ideal time to discuss this: how is the employee experiencing this transformation? Do they need support? Use reviews to detect weak signals and take action before disengagement sets in. 

Monitoring and Analyzing Performance Reviews

During the review cycle  

During the performance review cycle, HR’s role is to track progress, communicate regularly, and ensure completion. 

Using a dedicated performance review solution, HR can easily create dashboard to track progress, monitor completion rate for individual reviews, identify any unplanned or overdue performance reviews, and spot any managers who are falling behind with their evaluations. 

Don't hesitate to communicate regularly on the progress of the end-of-year interview campaign and send targeted reminders. An overwhelmed manager may forget to schedule their performance reviews, and an employee may hesitate to follow up with their line manager. Your role is to streamline this process so that every annual review is completed on time. 

After the review cycle 

Once performance reviews are complete, it's time to analyze the results. Consolidate the data gathered during the evaluation: what training needs were expressed? How many employees requested internal mobility? Are there any signs of disengagement or risks of departure to anticipate? 

Also analyze your success indicators: annual performance review completion rate, manager and employee satisfaction with the process, achievement rate of the objectives set during previous assessment reviews. These metrics allow you to identify areas for improvement for the next cycle.  

Finally, consider moving from a purely annual approach to more regular dialogue. Quarterly or semi-annual reviews allow you to track objectives over time, detect weak signals earlier, and avoid the “marathon review” effect of a single annual performance review. 

The annual performance review is more than a procedural meeting; it’s a strategic HR opportunity to connect individual goals with company ambitions. 

By structuring your performance review cycle, training managers, and leveraging technology, you can turn these employee evaluations into a catalyst for engagement, growth, and retention. 

Ready to simplify your 2026 performance review cycle? Discover Skillup’s Performance Review module: automated planning, customizable templates, and real-time analytics to manage your reviews with confidence. 

FAQ: Your Questions About Annual Performance Reviews 

Can employees refuse to participate in an annual performance review? 

No. If annual performance reviews are required by the company, a collective bargaining agreement, or mandatory (fixed number of days), employees cannot refuse to participate without facing disciplinary action. Refusal may be considered a breach of their professional obligations. 

When should you start your annual performance review cycle? 

Ideally, 3 to 6 months in advance. For an end-of-year campaign, start in September-October to coordinate budget cycles and avoid vacation periods. 

What tool should you use to manage annual performance reviews? 

Dedicated software (HRIS or a specialized solution such as Skillup) rather than Excel. Advantages: automatic invitations, real-time monitoring, centralized history, and considerable time savings. 

What documents should be prepared before the performance reviews? 

HR should provide managers with a history of previous reviews, employee self-assessments, 360° feedback, performance dashboards, and last year's objectives. This documentation enables factual and objective assessments. 

How can you train managers who have never conducted a performance review? 

Organize practical workshops with role-playing exercises, provide a detailed preparation guide, and offer structured interview templates. Emphasize active listening, managing cognitive biases, and handling sensitive situations (employees in difficulty, requests for raises).