Performance Evaluation Best Practices

The annual review should be brief and non-confrontational. The reason for this is feedback should be ongoing. Nothing should come as a surprise to the person being reviewed. Feedback should be part of the company culture of running the business day to day. However, to make this effective the reviewer cannot be too far removed from the individual being evaluated. It is important to delegate responsibility for reviewing performance and have confidence that it will be handled in a fair and dignified manner.

If you are open to cultural change, research about OKRs (Objectives and Key Results).

The most important for performance evaluation are assumptions. If you define them clearly for the manager and also for evaluated employee it is going to be quite simple process with huge outcomes. I see outcomes mainly for people conducted or somehow engaged in the process.

So and which assumptions you should firstly define:
1. what is core business of organization (if I have bookkeeper in accounting company - his responsibility is different from bookkeeper in manufacturing company).
2. purpose of evaluation (what does it mean for manager, for employee, for whole organization, for co-worker and so on),

there are maybe other assumptions but It also depends on different type of company. And every company should find their own one the most important. But communication should be remain stable.

Our annual evaluations for employees is a 360 degrees kind of a review and consist of four parts: The first part lists and describes three accomplishments during the review period. The employee fills out the section. The second part is performance rating with two columns for self and manager rating. It's based on a 3 points scale where 1 is weakness, 2 is mostly and 3 is strength. Some of the items on the list are: takes responsibility for actions and results, works to the best of abilities, is viewed as trustworthy in word and deed, etc. The third part consist of a Start, Stop, Keep section that compiles peer reviews that were submited anonymously via Formrouter. Things that could be listed are: Start - coming to meetings on time, Stop: texting during meetings, Keep: smiling. It brightens up everyone during stressful deadlines. The fourth part is an overall rating completed by the manager. The manager can choose from a drop-down list between Meets expectations, marginally meets expectations, does not meet expectations. Each manager meets with the employee to talk about the evaluations (for example, we talk about any differences between the managers and employees rating in the second part). During the meeting, the manager and employee also talks about the overall satisfaction with the job, if there is anything else that the employee would like to do or learn.

best performance reviews are often and actionable. Waiting til year end for a review is not timely, lacks reinforcement. I find weekly or monthly 1:1's with key staff where I provide feedback and recommendations on actions that everyone still remembers is best. And the annual review is just a summary of those mtgs from the past year. Usually there is no surprise at the rating and compensation adjustment. Poor performers got the message long time ago and already gone. The high performers received positive reinforcement and recommendations for further improvement throughout the year.