The annual performance review is a formal and scheduled discussion between an employee and their manager. Its purpose is to review the past year (results achieved, performance, etc.) and set new objectives. Some organizations take advantage of this moment to discuss expectations, successes, areas for progress and, possibly, career aspirations.
Are you an employee looking for good advice on how to prepare for your annual performance review? Consult the following article to learn how to better prepare your annual performance review cycles.
In most places, annual performance reviews are not required by law. Nonetheless, they are commonly used by companies and organizations to provide feedback and manage employee performance. This 1-to-1 exchange is an important part of the employee experience and a key tool in talent management.
As an integral part of HR strategy, performance reviews should be designed as a development tool, and not just an evaluation exercise.
Annual performance reviews serve several purposes. Here, we highlight 5 key reasons to carry out performance reviews each year.
The main reason to run to performance reviews is to measure the results achieved vs. objectives set. Management by objectives implies regular progress monitoring, ongoing adjustments and a flexible approach.
Annual performance reviews allow managers to offer employees formal, documented, and honest feedback on their work. Moreover, they provide an opportunity to highlight successes as well as recognize all the work employees have accomplished. They also provide an opportunity to address difficulties or shortcomings in a constructive way.
Good performance reviews open the door to the future. It's the ideal time to redefine priorities and set meaningful SMART objectives, ensuring transparency and aligning expectations between the employee and the company.
An annual performance review lays the foundations for the year ahead. For both managers and employees, it's a real opportunity to discuss both operational and strategic issues. What contributions have they made to the team? What skills or competencies do employees need or want to develop? Are there any potential difficulties that employees or managers should be aware of? Overall, performance reviews are a good way of strengthening the relationship of trust.
Finally, annual performance reviews feed key talent management processes: training and development plans, compensation adjustments, strategic workforce planning, internal mobility, and much more. When conducted properly, performance reviews become a gold mine for data-driven HR management.
In short, annual performance reviews are as much a human management tool as they are a strategic management tool. Its purpose is not to just tick an HR box, but to offer each employee meaningful feedback and insight.
Organizing performance reviews should not be left to chance. To ensure the process is truly valuable for both the employee and the company, careful planning is important at every step. Here's a step-by-step guide to help you effectively structure your next performance review cycle.
Depending on the company, HR departments determine a specific period for their performance reviews. It's also a question of working on the annual performance review framework or template that will be used as a basis for discussion.
A well-constructed annual performance review includes:
A successful annual performance review is far from a one-sided conversation. For discussions to be worthwhile, both parties, managers and employees, need to prepare ahead of time. Employees should take time to review their objectives, reflect on their successes, difficulties and expectations for the future. Meanwhile, managers should spend time gathering the results observed, concrete examples, KPIs, etc.
By preparing in advance, employees and managers can help limit potential misunderstandings. Involving employees from the outset reinforces employee commitment and a sense of fairness.
For managers, a good annual performance review is 70% listening and 30% steering. The manager must create a climate of trust to allow employees to express themselves freely.
For constructive feedback, the ideal is to remain factual (statements must be based on facts) and balanced. The manager highlights strengths and identifies areas for improvement. It's up to the manager to suggest concrete ways forward.
Objective: Everyone leaves with a clear vision of what has been achieved, what needs to evolve, and the means to achieve it.
Once the review cycle ends, it's HR's turn to roll up their sleeves. Annual performance reviews create value if the information gathered can be put to use in the service of collective performance. HR must therefore...
When properly used, performance reviews feed directly into training plans, succession planning, talent reviews, promotion decisions and internal mobility.
HR Tip: a good HRMS or talent review tool greatly facilitates this process. It transforms thousands of pieces of data into actionable insights. The result is action plans tailored to each individual employee.
All too often, the summary of performance reviews lie dormant in a file or drive. The result? Information is lost, and the effort put in by both manager and employee is wasted.
For performance reviews to have a real HR impact, it must be linked to :
A good practice is to set up a clear workflow between managers, HR and top management to formalize the decisions to be taken after performance review cycles. This will facilitate individual follow-ups (training, mobility, job development, etc.).
Tip: Annual performance reviews are a gold mine for talent management... provided it is integrated into a global HR approach, equipped with tools and connected to other processes.
To guarantee the quality and effectiveness of an annual performance review, it is vital to start with the proper template. It structures the exchange and aligns the stakeholders on the same page.
Here are the essential elements to include in your annual performance review template
HR tip: Share this template with your employees and managers in advance, ideally via performance review tool integrated into your HRMS. This makes it easier to track, archive and analyze all of your performance reviews.
👉 Need a template? Download our free annual performance review template to save time and harmonize your practices.
To get the most of out your performance reviews, here are a few simple practices to follow.
✅ For Managers
“Managers play a key role in developing and retaining talent,” stresses Julien Barone, HR Development Director at DOMINO RH.
✅ For HR
In most countries around the world, annual performance reviews are not required by law. It is, however, an internal managerial practice, often formalized by the HR department or enshrined in collective agreements.
In most cases, it's the employee's direct line manager who conducts this process. They know the field, the context and the actual results.
The HR department remains responsible for preparation, framing and follow-up: providing the form, training managers, analyzing results, etc.
Allow an average of 45 minutes to 1h30 per employee.
Less than 30 minutes is often too short to get to the important points. More than 2 hours is rarely productive - except in special cases (mobility, return from long absence...).