Let’s face it, most of us—managers and employees—don’t enjoy sitting down for a yearly performance review. But they’re an unfortunate fact of life: employees need to know whether they’re performing their duties well and where they may need to improve. Employers need a way to gauge performance as well as motivate their staffs to be productive and help the company improve. How you can make performance reviews meaningful for yourself and your employees?

• Prepare yourself throughout the year.
  Instead of reviewing all of your employees once, at the end of the year or the beginning of the new one, make observation and documentation an ongoing process. Observe employees in different situations, noting how well they work on their own or in collaboration with others. Keep a file in which you document their achievements as well as any shortcomings in performance. Write a summary that compares these observations to the goals set the previous year.
• Demystify the process.
  Let all of your employees know ahead of time how their work will be evaluated and what format you’ll be using for your files. If you’ll be filling out a form as part of the review, send that form to each of your team members prior to your actual meeting so they will know ahead of time what you’ll be discussing.
• Encourage conversation instead of delivering a lecture.
  The whole process will be far more effective if you and your employees can take part in a two-way conversation that focuses on what the employee has contributed and where she can develop and grow in the future. Be prepared to listen closely when asking questions like:
  • What do you hope to achieve in the next quarter/month/year?
  • How do you feel your goals align with our business objectives?
  • Do you need more support from me to help you reach these goals?
  • Do you feel you get the feedback you need?
  • How often should we meet to discuss your progress?
• Focus on goals and expectations.
  Start with the positive observations you’ve made. When it comes to areas where you noted shortcomings, frame your feedback as constructive criticism. Tell the employee you have faith in his or her ability to learn from past mistakes and improve productivity. Then make sure your employees clearly understand what’s expected of them. Have their tasks and responsibilities changed? Will they be changing in the near future? Work together to determine what is expected of them within the next 12 months.

Your goal for the performance review is to energize employees, help them feel more attuned to the business’s vision and see how their work fits into that vision. By following these tips, you should both leave the room with a feeling of purpose, not dread.

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