By Emily Ross
BRW. 23 June 2005

Staff reviews do not have to be empty gestures or awkward confrontations. Here are 10 ways to improve the process.

Employee performance reviews can fill people with horror faster than you can say "360-degree feedback". If done well, they can be a constructive part of employee motivation. But if done badly, reviews can contaminate the relationship between employee and manager long after the employee walks out of the interview room. The stakes are high for those conducting the appraisal and those being reviewed.

A good review is not one that merely praises the employee, but also contributes to the effectiveness of the organisation by examining ways to improve performance. To do this, there are several issues that should be considered for successful performance reviews.

1. Don't just tick the boxes

For many managers, the annual performance review of their staff is a chore to be dreaded. They just go through the motions, filling in the forms and filing them away for next year. Business coach Sean Spence says: "There is a compliance mentality about this process." The review process becomes an enormous bureaucratic nightmare, rather than an opportunity for frank discussion between a manager and their staff about their development and role in the company's strategy. In short, ignoring this review process is a wasted opportunity to lead. "All managerial activities are vehicles for leadership," says Spence. He says any manager who is not good at performance reviews raises questions about their leadership potential. For Ann Calman, Nokia's head of human resources in Australia and New Zealand, the performance review is "not about the tick and flick". Her strategy is to ensure that managers understand why they need to invest time in this process. "A manager is paid 52 weeks of the year to manage people," she says, so one or two weeks on the performance review process is not too much to ask.

2. Remember that staff thrive on feedback

In an ideal world, employees would receive feedback from their line manager all the time. In reality, this is usually not the case. For many employees the annual performance review is their one time of the year to get constructive feedback. A badly prepared manager conducting a performance review ends up covering up their lack of planning with an informal, chatty review. Or, in the worst case, two strangers just sit in a room with nothing to say to each other.

Most people, particularly ambitious people, thrive on feedback. "When that feedback is not there they feel they are not being heard," says Nick Greenhalgh, a founding partner of the human-resources consultancy Career Innovations. "They get a sense that their thoughts and ideas are not being included." This can be a sign that they might be better off in another job where their thoughts and ideas are valued. A bored manager going through the motions of a performance review can prompt an employee to walk out of the meeting thinking "Do I want to be part of this?"

3. Be prepared

If a manager has not prepared for a performance review it can greatly limit the discussions. If a manager has not looked over the records of their direct reports for the year, they will be unprepared for the review discussion, they cannot acknowledge the employees' work and contribution (or lack of it) and they can only speak in vague, general terms instead of getting to specifics and giving constructive feedback. This lack of preparation can be especially damaging if there are particular performance problems that need to be dealt with. A smart manager will set an objective for the discussion, with a goal that the employee will leave the meeting with a sense of action, clear about the things they need to work on and develop. "Equally, employees need to be prepared," says Calman. "They need to back their own issues up with evidence."

4. Identify the important matters

A manager needs to identify the important performance issues and come into the meeting with specific examples of how something has, or has not, gone well. A manager should be able to clarify what it at stake.

A critical part of the preparation is considering the questions that need to be asked during the review. Think beyond "So, how do you think you've done?" to details about particular projects and situations, ways that things could have been improved - and then drill deeper.

Ignoring the attitudes and behaviours (positive and negative) that need to be discussed leaves the employee unclear about their performance and development needs. The company's strategic goals, and the employee's role in them, must be discussed.

5. Deliver the difficult messages, and back it up

It is tempting to avoid issues and problems in a one-on-one discussion. From Spence's experience, a common avoidance tactic is to spend the whole meeting ticking all the boxes in the performance review and never directly dealing with the problems that need to be discussed. Consultancies such as Hewsons and Career Innovations refer to Fierce Conversations, a book by Susan Scott that offers simple frameworks on how to have the painful discussions. Scott recommends this strategy: identify the issue, explain what is at stake, describe your response to the situation, and invite people to respond around the framework of "what are we going to do about it?"

The managing director of Hewsons Australia, Richard Hewson, uses this model "because it takes the emotion out". It is about the "I think you can do better" message, without taking the high ground and going into a spiel about how they could have done better.

6. Do not do all the talking

Ask for thoughts, views and opinions. "View the person as capable of achieving their goals and maintain their self-esteem wherever possible," Hewson says. In the process of the review, help the employee to articulate the situation for themselves rather than telling them what the situation is. "There is more accountability when we talk," Hewson says. "We believe more what we say than what we hear."

7. Do not get distracted

Avoid rescheduling the meeting, taking calls from your spouse during the meeting, cancelling the review altogether or complaining about the number of performance reviews that have to be done.

8. Do not do a lot of reviews in one day

It is easy to get stale sitting in a meeting room, doing consecutive interviews. "It becomes a process, like a sausage factory," says Greenhalgh, who suggests that two or three in a day is plenty. "It frustrates managers when they feel that they are overburdened with a need to do it all in three days. It loses its currency. Similarly when the forms are too long and too complicated and the managers haven't bought into the process, it defeats the purpose."

9. Make staff development a priority

General Electric's former chief executive, Jack Welch, was notorious for using every possible opportunity, from coffee breaks to site inspections, to be candid about his expectations of his people. His performance monitoring happened all year. "For leaders, success is all about growing others," he says.

The managing director of Barrett Consulting, Sue Barrett, conducts reviews every four months with her 10 staff. "We review what has happened and look at what needs to happen," says Barrett, who also plans discussions with contractors. The focus is on how a person's job is fitting in with the overall strategy of the business. This can mean that roles need to be adjusted to fit the business direction.

10. Continue the conversation

Jack Welch says: "Too often, managers think that people development occurs once a year in performance reviews. That's not even close."