Performance reviews have a bad reputation: employees usually dread them, and managers often see them as an obligation. If done right, performance reviews can encourage high performers and motivate those who aren’t yet doing well. This article offers a few tips that will help you get the most out of your performance evaluations.

As dreaded as they may be, performance reviews are necessary. For big companies, they might present the only opportunity for management and their subordinates to reflect and plan for new goals and professional growth. They are the perfect opportunity to reward valuable employees with a salary bump or a bonus, and to offer constructive criticism to employees who aren’t excelling.

A performance review doesn’t have to turn into a sadistic process. Managers should make it a point to comment on what the employee has done right, offering helpful suggestions to boost their productivity in the future. This process shouldn’t be viewed just as a formality – it can actually strengthen the employer-employee relationship. Here are some tips that will help you better evaluate your staff.

Think of the performance review as a process

A performance review should be seen as a process rather than an event. If you are concerned with your employees’ well-being, lay the groundwork for performance reviews throughout the year. As a manager, make it a habit to regularly check in on your employees. You can even hold monthly meetings to see what everyone is up to. This will allow you to touch base with your staff on a regular basis, make personal connections, and figure out along the way if any improvements are needed.

When you check in on your employees, ask specific and relevant questions. A simple “How’s it going?” isn’t always enough. Ask them if they are able to finish their tasks on time, if they are satisfied with the equipment you provided, or if they have any suggestions for a smoother workflow. Keep in touch with the department heads, and ask them regularly if there is anyone who's been particularly helpful who deserves recognition. Write all this information down – it will come in handy when performance reviews are due.

Start it off as a dialogue

When you sit down with an employee, start by asking them how things are going from their perspective. Even if you’re initiating a review, make it more of a conversation and less of an evaluation to help your employee unwind and become more open to suggestions and criticism. You can also gain some insight on how your employee views his or her efforts and their role within the company.

Setting a constructive tone to the dialogue may even encourage the employee to bring up potential areas where they are struggling, along with potential solutions to overcome them.

Highlight what they’ve done right

Establish a format for all of your performance reviews. Start by setting an agenda for the meeting, then continue by emphasizing what the employee has done right. After emphasizing their strengths, bring up potential issues. Discouraging the employee from the very beginning won’t do you any favors, and may actually damage their morale, making them withdraw mentally or emotionally from the remainder of the review.

By pointing out where they excel, you will make employees feel like their work is noticed and valued. This provides positive reinforcement and sets a better tone for the dialogue, even if you have to offer some constructive criticism later on. If they had to take any pre-employment tests before being hired, pull out their results and explain how much their skills have improved along the way.

Give practical and specific feedback

When an employee isn’t performing as well as you’d like, putting him or her down isn’t the right choice. Approach them with tact, but don’t sugarcoat the truth – as long as you are respectful and open, you avoid turning the dialogue into a confrontation. Don’t dwell on a goal that has already been missed; instead, spend your time discussing the road ahead.   

Also, make sure to be as specific as possible. For instance, don’t say, “I’ve noticed that you rarely meet your deadlines – this is a serious issue for us.” Instead, say something like, “You’ve missed your last three deadlines. What do you think is holding you back?”

Set expectations for the future

Even if the employee is truly exceptional, there is always room for growth. You shouldn’t conclude your meeting by telling your employees they’re amazing, then dismiss them without any useful advice. If the employee is interested about advancing in his/her career, think about specific skills they should develop in order to reach their goals.

You should also help the employee understand what’s next for him or her. Maybe they are in line for a promotion, or maybe they risk being let go if they don’t make the changes you’ve suggested. Share your plan for each individual employee; this could help them stay focused and motivated.

Use performance reviews wisely – use them to both evaluate employee performance so far, as well as to set a few goals for the future. Create a dialogue, avoid confrontations, and do your best to understand your employees’ point of view. Finally, make the majority of the conversation positive and reinforcing; this way, your employees will be more motivated to improve their performance in the future.