The Complete Guide to Employee Performance Reviews (+ Free Template)

As a leader or HR professional, you’re responsible for ensuring a robust performance review process that helps employees receive feedback, set and achieve goals, and develop their careers. Without performance reviews, employees lack clarity about their performance and miss out on opportunities to improve. 

Holding regular performance reviews can help you and your employees stay aligned, but where do you start? This guide covers everything you need to build, manage, and document your performance review process. We also include a handy free template and explain how to simplify the process with performance management software. Let’s dive in.

What Is an Employee Performance Review? 

An employee performance review is the process in which leaders assess an employee’s performance and provide formal feedback and guidance. 

A typical performance review comprises the employee’s self-review, manager feedback on successes and areas of improvement, an overall performance rating, and goal setting. 

While managers should provide consistent feedback to employees as it comes up, a performance review offers dedicated time and space to exchange feedback and work together to set goals and growth areas.

By setting aside specific time to discuss performance, achievements, and goals, you ensure your employees feel you’re dedicated to their growth and success.

Types of Performance Reviews

While there are a few types of performance reviews, it’s important to decide on a structure and frequency level and stick with it for all employees. 

Monthly 

If you want a frequent touchpoint with your employees, a monthly review lets you provide formal feedback more often, giving your employees a chance to continuously improve. One way to structure these is with a 30-60-90 structure, wherein you agree on goals to achieve by 30, 60, and 90 days out. 

However, monthly performance appraisals can be time-consuming. With frequent evaluations and feedback sessions, it can feel like you’re always working on performance appraisals, which can be stressful. Such frequent reviews can also lead to employees focusing more on short-term goals than long-term growth.

Quarterly

A quarterly evaluation has the benefit of being less time-consuming, as it takes place only 4 times a year, while still providing frequent feedback. Gathering feedback over the course of a quarter allows for a more comprehensive review and a focus on longer-term, strategic goals. 

On the other hand, with a quarterly cycle, your feedback to employees may be delayed. This can hinder improvements. Workers also have to wait longer for formal positive recognition. 

Annual or semi-annual

For a more comprehensive assessment, many companies choose an annual or semi-annual (meaning twice yearly) performance review. This allows a longer-term evaluation of an employee’s work and more in-depth goal-setting and career growth planning. It also reduces administrative burden, as reviews take place only once or twice a year. 

However, with less frequent formal feedback, course corrections or performance improvements may take longer.

Who Runs an Employee Performance Review?

Typically, managers run performance reviews with support from HR or other leadership. 

As a manager, you know your employees’ work best. Plus, an employee’s relationship with you is likely stronger than with HR or your boss. In most companies, once there’s a documented performance review process, it’s overseen by the HR department.

Why Are Performance Reviews Important?

People often find performance reviews intimidating. An official meeting to discuss performance with the boss can be anxiety-inducing. However, performance reviews serve an important function and should be treated as a positive experience. 

Performance reviews provide the opportunity for you to share feedback—both constructive and positive—with your direct reports. 

It’s also a chance to align on goals and expectations, so your employees leave the meeting with clarity and insight into their career progression. 

Additionally, reviews are an excellent opportunity to recognize high performance and acknowledge accomplishments. A performance review can serve as a catalyst for promoting high-performing employees and is an opportunity to think about succession planning.

Of course, a performance review is also a time to connect with employees who aren’t performing to expectations. An open and honest discussion about expectations and where the employee falls short can help you set strategies for improvement or understand additional training needs. 

How to Conduct an Effective Employee Performance Review

In order to make your performance reviews effective and motivating, there are a few tips to keep in mind. 

Meet with employees privately, and ideally in person

Employee performance reviews are nerve-wracking and can be emotional, so a personal touch matters. Hold the review in a private place, such as your office, to ensure confidentiality. It’s best to conduct the review in person as well, but if that’s not feasible, try a video meeting. 

Speaking face-to-face—whether over video or in person—limits misunderstandings, miscommunications, and distractions.

Be specific and detailed 

One of the most important performance review tips is to be specific. Just like feedback should never be a surprise, it should also never be ambiguous. Give employees the necessary clarity about their performance by discussing specific examples with them.  

This applies to both positive and constructive feedback. It’s just as important to give specific examples of achievement as it is to share clear areas of improvement. Specific feedback makes it clear your assessment is based in fact. 

Here are a few helpful before-and-after employee performance review verbiage samples:

• “You’re working too slowly and it doesn’t meet expectations.” → “Our expectation is for you to pack 70 widgets per hour, and your average was 50 per hour. To meet the expectations in the role, you’ll need to be at an average of 70 per hour.”

• “You’re great at helping the team.” → “You’ve spent 25% of your time this year helping us train new employees. You took the initiative to do this on your own and new hires have gotten up to speed a week faster than they used to. Great work!”

Be honest, direct, and kind

It isn’t always easy to give constructive feedback, but a performance review is meant to help employees grow. Therefore, being honest about performance is a key part of the process and one of the biggest performance review tips for managers.

To do this, remember your goal: to coach your employees to be the best they can be. 

Setting the stage for this begins well before the review. The first step is to build a strong relationship over time and show your employees you care about their growth. You can achieve this by holding regular meetings with workers, providing them with growth and development opportunities such as training and mentorships, and demonstrating empathy day to day.

Then, during performance reviews, ensure your feedback is honest, direct, and kind. Some ways to achieve this include:

• Using “I” statements. This can help you avoid sounding like you’re pointing the finger or placing blame on the employee.
  • For example: “You make your coworkers feel bad when you talk over them in meetings.” → “In our last 2 meetings, I noticed that you spoke over some of your coworkers, which prevented them from fully sharing their thoughts.”

• Sharing examples. This contextualizes feedback and helps employees see where they’re excelling and where they need to improve.
  • For instance: “You’re never on time.” → “In the last quarter, I see you’ve been late by at least 15 minutes for 20% of your scheduled shifts.”

• Avoiding subjectivity. Be fair and objective with your language instead of using absolutes like “always” or “never” or vagaries like “good” or “bad.”
  • For example: “You always make mistakes.” → “I noticed that your last 3 reports contained some errors, which made it difficult for the rest of the team to understand your points.”

• Sharing suggestionsfor improvement. Set employees up for success with actionable suggestions and ‌resources to help them improve.
  • For instance: “You need to get better at presentations.” → “I found that your last presentation wasn’t as clear and structured as it could have been. I’ll email you some resources on public speaking that I recommend you review. Let’s also set up a one-on-one training session for next week.”

We also recommend avoiding the “compliment sandwich,” as it can feel gimmicky and ineffective. This is when you share positive feedback, then negative feedback, and then positive feedback again. Instead, consider breaking the performance review into a section about achievements and a section about areas of improvement. 

Don’t let bias seep in

It can be easy to unintentionally use biased language in performance reviews. For example, descriptors like “abrasive” or “nice” can have negative connotations for women. While bias at its worst can result in racism or age discrimination, be aware of other common biases. 

Managers may offer a more favorable review to someone they feel an affinity with (similar-to-me bias) or someone with whom they recently spent a lot of time (recency bias). 

If a manager strongly values a certain trait or skill, they may fall trap to the halo or horns effect—giving an excellent review to someone who embodies that skill or a poor review to someone who doesn’t, even if it’s not related to the job. 

Using examples and ensuring your feedback is honest and objective are great ways to avoid bias during performance reviews. Take it a step further by gathering feedback from multiple sources to ensure your evaluation of an employee isn’t skewed by your own personal perspective. Speak with the employee’s coworkers, direct reports, and other managers.

Don’t forget to ask for feedback about your own performance

Take a few minutes to solicit feedback from your employees: Are there ways you could better support or recognize them? What would help them be more successful? 

Be sure to listen and take their feedback seriously. If you make any changes, set a reminder to check in after a few weeks or months to learn how things are going.

End with a sense of encouragement and a clear path forward

Whether the review trended toward the positive or negative, end on a positive note. Reiterate the overall points of the assessment and what you expect going forward. Be clear about what you expect and ask the employee what they need from you. 

They should leave feeling encouraged, supported, and like they have something to work toward—even if the review itself wasn’t entirely positive. 

Let them know when you’ll check in again and thank them for meeting with you and discussing their performance. You can also follow up with them via email or direct message to let them know you appreciate their time and efforts.

Share feedback between reviews

One of the most important rules of performance reviews is that they should never be surprising. Avoid catching your employees off guard by providing feedback throughout the year. Your employees will appreciate the transparency, and regular feedback will help them course correct as needed. 

This will also help you write up the formal performance evaluation. Take notes throughout the review period and document feedback as you give it. This saves you from having to remember everything on your own and makes sure your employees receive a full and fair evaluation. 

Employee Performance Review Examples: Focus Areas and Questions

The specifics differ between organizations, but there are common elements in all performance reviews. Use the example focus areas and questions outlined below as a starting point to determine how to evaluate employees at their next review.

• Role proficiency: Is the employee aware of and achieving the requirements of the role? Does their work meet or exceed the expectations of the position? Refer to the job description or career ladder to assess how your employee performs against it.

• Leadership: Does the employee lead by example and take initiative? Do they share knowledge with others on the team? Do they offer new ideas and solutions?

• Metrics and KPIs: Is the employee able to achieve the goals of their position? If there are specific key performance indicators (KPIs) for their role, do they meet or exceed them? In what ways does the employee go above and beyond?

• Teamwork and collaboration: How does the employee collaborate? Do they regularly seek and offer feedback and learn from team members’ insights? Do they work toward the team’s or company’s common goal?

• Customer service: Are the employee’s customers, clients, or stakeholders delighted by the service provided? 

• Impact: Are there examples of the impact the employee has had on the team, department, or company?

• Communication: Does the employee communicate clearly and effectively to all levels, including active listening and prompt responses? 

• Company values: Does the employee embody the company’s values and principles? 

You can save time and effort in the performance review process by using a template. We’ve provided one for you below.

Employee Performance Review Sample Template

Employee Name:				Role:
Review Period:				Date:
Performance Rating: 5 – Frequently Exceeds Expectations4 – Sometimes Exceeds Expectations3 – Meets Expectations2 – Sometimes Meets Expectations 1 – Does Not Meet Expectations
What are [Employee Name]’s most significant achievements in the past review period?
What could [Employee Name] have done better? How can they improve?
What should [Employee Name] focus on over the next period? Goal #1:Goal #2:Goal #3:
Focus Area	Rating (check one)
1. Role proficiency	5	4	3	2	1
2. Leadership	5	4	3	2	1
3. Metrics and KPIs	5	4	3	2	1
4. Teamwork and collaboration	5	4	3	2	1
5. Customer Service	5	4	3	2	1
6. Impact	5	4	3	2	1
7. Communication	5	4	3	2	1
8. Company Values	5	4	3	2	1
Overall Average Rating:	Add numerical scores together and divide by 8

How to Prepare to Conduct a Performance Review

Preparing for performance reviews doesn’t have to be difficult, but it’s important to be diligent. You need to:

Set objectives

Be clear on the objectives of the review and what you hope to accomplish. This could be addressing performance concerns, discussing career development, or recognizing a job well done. 

Keep and review documentation

Just like you want to document ongoing feedback, remember to document formal reviews. Appropriate recordkeeping lets you refer back to past reviews and track documentation of any performance concerns. 

Before the review, take a look at past and current performance information and prepare specific examples to go along with your feedback. Consider soliciting input from your employees’ colleagues, direct reports, and other supervisors.

Understand the rating system

Employees should all be rated on the same scale. Many companies use a 5-point scale to measure employee performance. The exact scale varies between organizations, but a general breakdown of the scale could look like this: 

• 5 – Frequently Exceeds Expectations
• 4 – Sometimes Exceeds Expectations
• 3 – Meets Expectations
• 2 – Sometimes Meets Expectations 
• 1 – Does Not Meet Expectations

You and other managers should hold calibration sessions to ensure consistency across employee ratings. During this meeting, each manager can explain the rationale for their team’s scores and make sure decisions are objective and fair.

Provide manager training

To ensure a fair process for all employees, managers should receive performance review training. It’s a good idea to offer a refresher prior to each review so the information is fresh in everyone’s mind. This is also a good time to call out any legal considerations, like avoiding bias and discrimination and adhering to privacy rules.  

Go in to review sessions open and focused

As you prepare to conduct a performance review, be ready to receive feedback on your performance. While it may be difficult to hear constructive feedback, stay positive and keep an open dialogue. 

Performance reviews aren’t always straightforward, so prepare for curveballs too. Don’t be surprised if an employee reacts poorly, asks combative questions, or even cries. Remain as calm and neutral as possible, and do your best to steer the conversation back to their performance. Focus on objective facts rather than subjective statements, opinions, and feelings.

Finally, clear your calendar. A review is a 2-way, trust-building conversation, so it’s imperative to be undistracted and not rushing through the review to tend to another commitment.

How Performance Management Software Can Help

While a template can help, it’s even more effective to use performance management software  to conduct employee performance reviews. One excellent option is Connecteam, which offers a suite of tools for the entire employee lifecycle, including performance management.

This software lets you document feedback and reviews, provide employee recognition, and plan for reviews with ease. It also helps you:

Recognize strong performance 

You know the importance of regular feedback and recognition, and a strong performance management software lets you offer recognition and acknowledgement to your employees. With Connecteam, for example, you can celebrate anniversaries or other milestones, give shoutouts for excellent performance, and even send employees digital tokens they can redeem for awards like gift cards.

Document performance

By using software to document performance and feedback as it occurs, you’ll find preparing performance reviews a snap. For instance, Connecteam lets you keep track of employees’ successes and accomplishments and share updates on anything from KPI achievements to customer success stories. You can also use employee timelines to keep past performance reviews, pay changes, and achievements right at your fingertips. 

Share important information easily

Need to get the word out about upcoming reviews? The right performance management software will include communication tools that let you send details to your entire company in seconds, minimizing confusion and keeping everyone in the loop. You can make performance reviews simple by sharing process documentation, performance review tips for employees, and deadline reminders.

For example, Connecteam’s communication tools include an in-app chat and an updates feed. You can share information and announcements—in writing, video, or even funny GIFs—to specific employees, groups of people, teams, or the whole organization at once.

Get started with Connecteam for free today!

Gather employee engagement information

As a manager, you’ll want to understand your employees’ thoughts, whether on the performance review process or their general satisfaction. There’s only so much time to discuss this during the review itself—but you can use performance software to capture all the information.  

With a software solution like Connecteam, you can create surveys and polls in seconds, then send them out for your employees to complete in real time. Some platforms also have forms and suggestion box features to solicit even more feedback from your workers. 

You can use this data to refine your approach to performance reviews and make meaningful improvements across the company. 

Conclusion

You’re now armed with all you need to conduct efficient, effective employee performance reviews. By using the best practices and performance review template in this article, you’ll be ready for reviews, and your employees will never be in the dark about their performance again.

As you go through the review process, pay attention to opportunities to increase efficiency, and remember that performance management software can be a very helpful tool. If you’d like to integrate performance management software into your review process, consider using Connecteam as an all-in-one performance management solution.

FAQs

What is the 5-point scale for performance appraisal?

Many companies use a 5-point scale to measure employee performance. Although it can differ between companies, a general breakdown of the scale is as follows: 

• 5 – Frequently Exceeds Expectations
• 4 – Sometimes Exceeds Expectations
• 3 – Meets Expectations
• 2 – Sometimes Meets Expectations 
• 1 – Does Not Meet Expectations

What are the golden rules for a performance review?

Managers should prepare ahead of time by keeping track of employee performance throughout the review period. They should set aside ample time for a performance conversation and be available to answer the employee’s questions.