5 Facts Leaders Need to Know About Annual Reviews



It’s that time of year - leaders are gearing up to review their team in a formal Annual Review process. It's a time to review of the year’s results, how the individual contributed to those results and what areas of performance the individual does well and where there are opportunities for growth.

After over 20 years of leadership and thousands of annual reviews written and examined, I’ve come to know these 5 facts from experience, especially from times when I got it wrong.


Let’s start with two basic reminders that, unfortunately, many leaders fail to learn or remember each year.


2 Reminders When Preparing the Annual Review


Reminder #1 - No Surprises


The worst annual review discussion will always include a surprise – and not a good surprise. It typically involves the recipient hearing or seeing something for the first time.


If a leader is proactively coaching and having 1:1 sessions throughout the year with the direct report, any summary of the year in the annual review will be just that – a summary of events and performance that has already been discussed and documented. It's not the place to suddenly bring up something new.


When I took on my last role in the financial services industry as a Regional Sales Manager, my first job was to essentially deliver 12 annual reviews full of surprises. This was not ideal, to say the least. The recipients of these reviews had taken on a new role that year and had not seen the results for the entire year!


I had been given this promotion opportunity, but I inherited all the issues from my predecessor. The current year’s scorecards had never been shared or discussed, although a new one had been published each month.


The review sessions were rough, but it taught me a valuable lesson – the frequency and transparency of conversations I needed to have with my team was paramount. Not only because it would make for an easier end of year discussion, but for the real benefit of the team member and to allow them to know what needed improvement and how we could get there together.


Reminder #2 - It’s About the Behavior

When a team member is having a performance challenge, it’s about the behavior. When they are a rockstar, it’s about the behavior. The behaviors that drove the result need to be discussed and any commentary in the annual review should reflect the behavior that needs to be changed, continued, or celebrated. You're evaluating the behavior, not the person themselves.


This seems so easy on the surface, but after going over countless annual reviews each year, I would undoubtedly find commentary that was about the individual, not their behavior.

Always, always remember to describe what you can see or hear. If you can’t describe the behavior, check whether it’s an opinion more directed at the individual versus their contribution.


Remembering to review a person's behavior instead of their personal qualities goes a long way toward making the annual review feel less like a battle where the team member needs to defend themselves.


3 Tips to Have a Successful Annual Review Discussion


I strongly believe that all annual reviews need to be accompanied by a discussion. Whether it's before, during, or after you provide the written review, each employee deserves the opportunity to have a forum in which to understand and ask questions. They also need to be afforded the opportunity to respond in writing if they choose to do the annual review in a space separate from the formal meeting.


Here are a few tips to have a successful discussion.


1) Consistency is Key


As a leader with many direct reports in the same position, I found the more consistent I could be with what I discussed in everyone’s review, the better the review would be received. Whether we want to believe it or not, I know that at some point, team members will share what was written with each other.


Each year, I created an outline that allowed me to plug in that individuals’ results, add specific commentary to the individual, and provided a balanced assessment of their contribution to the team and organization results.


The outline ensured that both what every individual did well and where they had opportunity to improve was captured. I would use this format and encouraged the same practice region-wide to make the annual review process as equitable as possible. Since the annual review is something that goes in the employee’s record, it was important to me to ensure that each review told an accurate and clear story.


2) Make it Actionable


When identifying areas that need improvement as part of the review process, we need to make sure those improvements are actionable.


The more specific we can be on what behavior we want to see and expect, the more likely the recipient can turn those requests into action.


Vague: “Jim should work to improve his service quality.”

vs.

Actionable: “Jim can improve his service quality by using the caller’s name and check for understanding by summarizing what he heard back to the caller.”


Vague: "Jane’s sales results need to improve. “

vs.

Actionable: “Jane can improve her sales results by scheduling 2 to 3 one-hour sessions per week to focus on follow-ups.”


Hopefully you can see the difference between the two statements. If the second, more actionable option was used, both Jim and Jane would walk away from the annual review with a clear understanding of how their supervisor expected them to improve.