When it comes to managing employee performance, many businesses miss the mark. Here’s why: They put all their focus on the annual review, rather than treating performance management as a dynamic, year-round process.

If you only share feedback at review time – sitting across a desk and checking off boxes on a rigid appraisal form – you’re overlooking valuable opportunities to mentor, support and guide your employees.

A recent Gallup survey regarding employee measurements supports this position. The survey found that only 1 out of 5 employees strongly agree their performance is managed in a way that motivates them to do outstanding work. Yet employees who strongly agree that their managers hold them accountable for their performance are 2.5 times more likely to be engaged in their jobs.

For more relevant, motivating and results-driven performance management, you should:

1. Set the right foundation at the beginning of the year. Create structure around your expectations for the position and what a positive, productive year should look like. With the employee’s input, develop a handful of objective, measurable goals. Aim for the “sweet spot” – goals that are aspirational, yet attainable. If goals are too easy, the employee may get bored; too difficult, and he or she will get frustrated and is more likely to disengage.
2. Provide regular and balanced feedback year-round. Performance management isn’t just for addressing concerns. If you’re plugged into what your employees are doing day to day, you can take a more balanced approach, where you confront the negative as well as highlight the positive. With problematic issues, be timely and specific with your feedback. Be aware, too, that constructive criticism often is better received if you have a fair and supportive relationship with an employee.


Reinforce the employee’s strengths (with specific examples) at the beginning of the review to set a positive tone and help put the employee at ease.

3. Keep track of daily performance. A performance log lets you jot down notes about an employee’s good or bad behavior, as you observe it or hear about it. This information can be a vital reference for weekly or monthly discussions and, certainly, much more reliable than your memory will be at review time!

   OK, you’re keeping the lines of communication open with your employees and providing thoughtful feedback on a regular basis. But you also need to complete a written appraisal and conduct a formal, one-on-one review. Here’s how to make the most of it:

4. Be prepared. Before sitting down with the employee, take some time to think through what you’re going to say and how you’re going to say it. Whether you use a standard performance appraisal form or some other written format for rating key performance factors, you still need to talk through the contents and fill in additional details. Try to anticipate the employee’s response to any constructive criticism and how you will reply.
5. Lead with the positive. Performance reviews can be as anxiety-inducing for the employee as they are for the manager or supervisor. Reinforce the employee’s strengths (with specific examples) at the beginning of the review to set a positive tone and help put the employee at ease. Keep in mind, too, that you should NEVER address an issue for the first time in a review.
6. Strive for a two-way conversation. An effective performance review is not a one-sided monologue by a manager. Rather, it should be an open exchange that allows employees to be heard and understood. Always seek out insights from your employees. Creating this dynamic will demonstrate that you value their opinions, which goes a long way toward improving engagement and morale.
7. Focus on what matters to the employee. Job satisfaction plays a huge role in an employee’s attitude and performance. Just as no two employees are exactly alike, there’s no such thing as a “one size fits all” approach to performance management. An effective review should explore the factors that matter most to the employee, whether that means accepting new challenges, working on teams, taking on more responsibility or receiving additional training. If you know what makes an employee tick, you can tie more of those motivators into his or her goals and objectives.

Learn How to Enhance Outcomes with Employees

For more insight on how to address the highs and lows of employee performance, check out the on-demand webinar, “Five Performance Management Scenarios: Navigating Everyday Encounters for Greater Results.” Whether you’re a new manager or a seasoned HR professional, you’ll gain valuable insights that can make a difference in your interactions with employees.