How to conduct an annual performance review: Everything you need to know

For every company, annual performance reviews represent a crucial moment in HR management. Yet 31% of employees say they are unable to express themselves freely during this time of exchange (source: HR Voice study). What measures can one follow to ensure that an individual review with an employee runs smoothly? How best to handle comments?

With this article, discover how to assess employee performance, set objectives and explore opportunities for skills development. Here's everything you need to know about the annual performance reviews!

Preparing for annual performance reviews

The first essential step to a successful annual performance review cycle is good planning. Start by establishing a clear timetable for the whole company, ensuring that each employee has an appropriate slot.

In addition, prepare and share a list of objectives for the annual reviews you wish to achieve during this campaign. This can include discussions on the past year's results, skills to be developed, future objectives and training needs. By having a list of objectives in mind, you ensure that the reviews are productive.

✨ Example: you're the HR manager at a tech company. The main objective of the review with a senior developer could be to discuss his contribution to a strategic project. It's up to you to define (together) the steps for the desired development of technical skills with a view to anticipating the training plan.

Before the review, gather relevant information about each employee. Consult their previous performance reviews, the objectives set at the previous appraisal and their notable achievements during the year. By understanding their journey within the company, you'll be better prepared to discuss their contributions and professional development.

✨ For example: You're managing a marketing manager's review. It's essential to know about the successful campaigns carried out during the year. You also need to identify areas where professional or skill development is required (digital, media training...).

Keep in mind that meticulous preparation of the annual performance reviews is essential to ensure productive and meaningful discussions. This includes planning and gathering information: skills assessments, history of salary increases or professional training...

Executing annual performance reviews

When you come face-to-face with your employee for the annual review, start by creating a warm and welcoming atmosphere. A smile, a friendly greeting or even offering a bottle of water will all help to create a calm atmosphere.

Then explain clearly how the annual review will be conducted, and what objectives you wish to achieve. Your employee needs to understand the purpose of the discussion and know what to expect. This promotes transparency and openness.

Start by examining the results observed in the course of the job. Highlight your employee's positive points and emphasize your interest in his or her contributions. This builds confidence and encourages a sense of recognition.

Then explore your employee's skills and strengths. Discuss the areas in which he excels in the light of the year's review, and those in which he can still improve. Encourage them to share their own thoughts on the evaluation grid. This type of practice, which highlights areas for improvement, encourages employee commitment!

Together, define clear, achievable objectives for the coming year. Make sure they are specific, measurable, achievable, relevant, time-bound (SMART) and, above all, meaningful. By involving your employee in this HR process, he or she will be more likely to invest in achieving these objectives.

Finally, talk about your employee's professional development. Identify training opportunities, skills to be reinforced and potential career paths. Encourage discussion of your employee's professional development, in line with the company's plans.

Conclude the review by summarizing the key points discussed, the objectives set and the next steps. Make sure your employee leaves the review with clear concluding sentences. It's up to you to ensure that they fully understand what has been discussed and what action needs to be taken.

By following this structure, you'll create an environment conducive to open and constructive discussion during the annual performance review. Your employee will feel understood, supported and motivated to take on new challenges in the year ahead.

If you don't already have a structured template in-house, you can download your own annual performance review template incorporating these themes. This will also be useful for producing the report: results obtained, professional objectives, professional development planned for the employee, etc.

Delivering feedback during annual performance reviews

Positive feedback plays a crucial role in performance reviews. They allow you to highlight and value the achievements and contributions of each employee.

✨ Example: “I'd like to congratulate you on your excellent management of the XYZ contract. Your contribution will enable us to invest in new resources.”

When addressing areas where improvements are needed, opt for a constructive approach. Avoid personal criticism and focus on specific behaviors or results.

✨ Example: An employee has encountered communication difficulties with his team. You might say, “We've observed some communication challenges, let's explore how we can work together to resolve them.”

Similarly, avoid judging your collaborator personally. Instead of saying: “You're not proactive enough”, opt for: “We've noticed some opportunities where a proactive approach could be beneficial. What conditions would be necessary to foster this approach?”

For each point of improvement identified, work with your employee to draw up a concrete action plan. Determine realistic milestones and deadlines for achieving the objectives.

✨ Example: If the development of technical skills is necessary, discuss the training courses available. An online training catalog makes the search much easier, on both the HR and employee sides.

By adopting a constructive feedback approach at the annual performance review, you contribute to a positive learning environment. Employees feel supported in their development. This strengthens the relationship between HR and Talent, while maximizing the effectiveness of the exchange.

Handling delicate situations during annual performance reviews

During any performance review, sensitive subjects or personal concerns may come up. In such situations, show empathy. Listen carefully to your colleague, show that you understand his or her feelings and issues.

✨ Example: An employee expresses concerns about their work-life balance and their heavy workload. Practice active listening, “I understand it can be stressful, we'll work together to find solutions that work for you.”

Performance reviews can evoke emotions in employees, whether frustration, disappointment or even joy. As HR, it's important to know how to deal with these emotions appropriately.

✨ Example: An employee expresses disappointment at a missed promotion. Let them know that you understand their feelings, while explaining the selection criteria. Offer to discuss the employee's professional development for the coming year.

In the event of employee conflict or disagreement, approach these situations calmly and objectively. Encourage the parties to express themselves, listen carefully to the other point of view and seek solutions acceptable to all.

✨ Example: Two members of a team have had frequent disagreements. Tackle the subject: “I understand that there have been tensions. For a harmonious working environment, how can we resolve these disagreements and foster better communication within the team?”

Dealing with emotions and delicate situations requires sensitivity and diplomacy. By managing these aspects with professionalism, you demonstrate your ability to support them in all situations. This helps to create a healthy and respectful working environment, where problems are resolved constructively.

Annual performance review documentation & follow-up

Make sure you thoroughly document everything discussed. This includes the objectives set, constructive feedback and any next-step actions agreed upon during the performance review. This work will provide a valuable reference for subsequent appraisals or evaluations.

✨ Example: Dedicated performance review software allows this information to be recorded in an organized and secure way. The data can be accessed by both the employee and HR managers.

After setting objectives and action plans during the reviews, regularly monitor their progress throughout the year. Schedule interim meetings to review progress, adjust plans if necessary and provide ongoing support.

✨ Example: An employee's goal is to acquire new leadership skills. Be sure to schedule appropriate training sessions and evaluate them periodically to measure progress.

Post-review follow-up ensures that the objectives set are achievable. Action plans must remain relevant to the changing business environment.

Ready for your performance review cycle?

By adopting a systematic, caring approach to the annual performance review, you create an environment conducive to growth, development and open communication within your organization.

Annual reviews can become a powerful tool for boosting performance, by strengthening professional relationships and promoting the long-term success of your employees and company.

By continuing to implement these tips and adapting them to the specific needs of each department, you will make a significant contribution to the: