Chapter 12: The Answer to the Dreaded Annual Review: No Surprises

No matter what business you’re in or what position you hold, there’s one guarantee.

Everyone hates annual reviews.

• Big companies hate them because reviews are a potential point of conflict that mean stacks of paperwork and missed hours of production.
• Small companies hate them because reviews destroy the idea that everyone is just one big happy team.
• Managers hate reviews because they don’t want to appear like Big Brother breathing down the worker bees’ necks.
• And employees hate them because they never know what’s coming–a raise or a reprimand.

The reality is that everyone’s fumbling around for a good framework, hoping that this uncomfortable time for judging employee performance can pass without too much drama or antacid consumption.

As a result, the “let’s just get this over with” mentality drives companies to choose lousy review formats. Some appear as rigid forms, long questionnaires and little room for feedback for management. Others show up as laid-back conversations full of encouragement, empty promises, and little direction.

Bad Reviews

Examples of lousy reviews abound. If you’ve been in any company for any length of time, you’ve had one or given one.

If so, don’t despair. You’ll get another chance to improve the process–for both you and the employee. But first, let’s talk about some of those dysfunctional review methods so we can steer clear of them.

The Naughty and Nice List

This is the annual airing of praise and grievances that can cover everything from a huge victory to that time you walked in late twice–about eight months ago.

This barrage of disjointed performance feedback is not helpful because the employee either doesn’t remember the incidents or isn’t emotionally invested in them. Usually, the focus is on trivial matters like attendance, and the employee leaves the meeting feeling beat up and confused, especially if their overall performance is good.

The Coffee Chat

This approach is used by managers who want to tone down the anxiety that naturally appears around reviews, so they try to stage the event like it’s just a couple of buddies going out for coffee.

The tone is usually casual and friendly, but often, the manager doesn’t communicate clearly about issues that need attention, and he comes off looking uncomfortable with his authority. This leaves the employee confused and less than confident in the manager’s leadership.

No Review

Companies that skip reviews do usually do it for understandable reasons: they’re not comfortable giving them, and it’s easy to put them off for another day, another month, or another year.

Hopefully, there’s still a regular, structured method for communication in place. If not, the company has just missed an opportunity to invest in their people. Employees don’t feel valued, and an essential communication pipeline is missing.

Good Reviews Offer Power and Potential

Yes, Virginia, there is such a thing as a good review–and even an excellent one!

Great annual reviews can happen in many ways that integrate smoothly into your management style and your company’s expectations. In fact, they can even be a tool that creates better communication, increased focus and productivity, and employee retention.

Think of it this way. If being a manager means that you’ve moved from a production unit to a communication hub, then planning and using good annual reviews are like swapping out a dial-up modem for a fiber optic link to your team.

Everything happens more smoothly.

When you take the pressure off yourself to perform admirably in this uncomfortable situation, you have room to hear what’s important to the employees you’re managing. They have the chance to tell you what matters to them, and you all have an opportunity to make your work together more than “just a job”.

But this doesn’t happen overnight. I’m a firm believer that regular feedback on small issues has the biggest impact to shape a positive employee-manager relationship. The annual review, if done well, is simply an extension of those conversations.

I’m happy to say that I now have years of practice giving great reviews under my belt, and it has made all the difference in what I can expect from my teams… and what they can expect from me.

Great reviews = possibility

The biggest surprise that most managers get from an excellent review process is that employees actually look forward to this process.

No kidding.

Employees see it as their time to reflect back to you what’s working, what’s not, and what they’d love to do. It has the potential to feel like a great jam session rather than a trip to the principal’s office.

Now let’s talk about how to make this possible for you and the team you manage.

The Best Review–No Surprises.

I was lucky enough to work for a company for several years that was dedicated to having a great annual review system. Seeing that process in action and having it supported at every level of the company definitely transformed my review process.

But even if you’ve never had a good review–from either side of the table–you can still make it happen for your department.

Here’s how.

No surprises, period.

My first rule for reviews is that no employee will ever hear information for the first time. No exceptions.

It doesn’t matter if their performance has been exemplary or just so-so, I refuse to blindside them with that information during this significant closed-door meeting.

Of course, this Zero Surprises approach depends on a policy of consistent feedback throughout the year, and I’ll cover that issue in detail in an upcoming article. But for now, remember that this is not the time or the place to break big news–good or bad.

Even if you’ve had a nasty blowout or a huge win with an employee just days before the review, handle that in a separate meeting. Don’t derail the agenda with one issue when you need to take the long view for an entire year.

The No Surprises Annual Review checklist

Yes, preparation is the key to success everywhere, and crafting good reviews is no exception. Here’s the foundation to creating a great annual review.

Set a date. Employees should know exactly when the review is coming and have time to prepare their materials such as goals, feedback, and questions for you (see below). I suggest scheduling this at least 2–6 weeks in advance and leaving at least an hour to cover the material.

Choose a location. An annual review needs to take place one-on-one in a private setting, so choose a conference room or an office with door so you can speak openly.

Check in with management about the financials. Know well before the review whether or not you can offer raises–and know what that number will be. “No Surprises” means no negotiating during the review.

Prepare a simple evaluation form. Asking employees to rate their own performance automatically turns the review into a dialogue. My standby form includes several (about 5 to 10) performance areas like productivity, quality, financial impact, and so on. Ask the employees to indicate whether they did well or need to improve in those areas.

Create an agenda that you share with the employee. This lets everyone know exactly what the meeting will cover so you have–you guessed it–no surprises. Make sure you leave time during the meeting for their questions or unexpected issues that crop up.

During the review

LISTEN. Then listen some more. You’re a communication hub, so make sure the communication goes both ways. Take as much time as needed to go through the material they’ve provided so you have a clear sense of their perspective.

Pay attention to their dreams. Once your team members understand and trust that you are listening, they will open up and offer suggestions you never imagined. These might range from revamping a workflow frustration that’s been plaguing the team or something like a company-sponsored smoking cessation class. You never know when you’re going to hear a great idea.

Be clear with comments, pro or con. If their performance is substandard in a certain area, state that clearly. Be equally as open about the stellar work they contribute. Don’t leave them wondering what you think of their contributions.

Keep your comments short and sweet. This isn’t the time to pontificate about your frustrations or hammer home the company’s mission statement. An excellent review is time for two-way communication, not soapbox rants.

After the review

Hang on to the evaluation form. This becomes the compass for weekly or quarterly reviews and is a simple way to maintain the “No Surprises” policy. When employees know you’re taking their comments seriously, they’ll honor yours, too.

Use the “needs improvement” column as an opportunity for investment. Once you see the annual review process as a communication tool instead of a yardstick, you have the ability to identify areas for growth and ways to provide real support. This support can yield huge positive outcomes.

Be flexible on the goals and dreams you set. Yes, it’s great to have accountability for goals and outcomes, but realize that about 30% of the items you’d love to accomplish for the year don’t pan out for a number or valid reasons. Don’t threaten your team with their own words.

But What if My Company Has a Firmly Established Review Process? Or None at All?

No Surprises Annual Reviews still have a place in companies where the human resources department handles all of the reviews… or the company is so small that it fits in one room.

Big companies occasionally insist that reviews are best handled by professionals who can manage and contain these interactions. Some small companies squirm at the perceived constraint of a process that feels like needless bureaucracy.

In either case, I completely stand behind the idea that a direct relationship with employees is essential to excellent outcomes.

Utilizing excellent annual reviews has eliminated confusion and drastically reduced turnover in the teams that I’ve supervised, so I make sure I use them.

If you can’t officially conduct an annual review, find a time and place off-campus to make it happen. Go out for coffee or a beer, but be clear with the employee that this meeting is significant to you.

Make it Count

If I had one piece of advice for new managers facing the dreaded annual review process, it would be this:

Take the time to do an annual review that matters.

Why go through a process that just gathers dust in a file cabinet when you can have a tool that creates trust, loyalty, focus, and imagination?

One of the best management moves I’ve made was to trade my apprehension around annual reviews for a real communication plan that offered you–and my team–no surprises.

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