Aside from celebrations, the end of the year is also the season for annual performance reviews. Avoid the sweaty palms and impending sense of dread by making the most of your performance evaluation with these tips.

Although they may generate a certain degree of stress, performance reviews are intended to help employees improve their effectiveness by measuring an employee’s progress and success in meeting a specific set of goals. The evaluation process aims to set a framework for future expectations and to allow staff to express their concerns to management.

There are numerous ways to make the most of this experience, turning the performance review into a valuable tool for career growth. While some critics claim that performance reviews are inherently flawed and need serious revision in order to provide accurate assessments, if you work for one of the majority of American companies sticking to the traditional review process, it’s a good idea to brush up on your performance review skills.

Succeeding in a Performance Review
A thorough performance review provides an employee with the chance to receive recognition for his or her accomplishments and articulate any views about his or her role within the organization. It also gives management the opportunity to identify areas that need improvement and possibilities for employee training or professional development. The overall goal is to foster greater communication between employees and managers, and the review is often tied to salary increases or promotions.

A performance review should be scheduled ahead of time, with enough time set aside to allow for preparation and an unrushed meeting. At her Escape from Corporate America blog, entrepreneur and author Pamela Skillings offers the following tips for an employee to make the most of a performance review:

• Understand the system. Try to determine your company’s main focus, the important decision-makers and their criteria for measuring success.

• Understand your manager. Identify your manager’s top priorities and highlight how you’ve worked on them.

• Do your homework. Try to come prepared with any documentation of your major achievements this year.

• Think like a marketer. Emphasize the ways in which your work has specifically helped your organization’s customers and contributed to its core services.

• Use numbers and examples. Instead of making broad statements, support your comments with facts and numbers, when available.

• Tell a good story. If statistics and hard evidence are unavailable, try to provide some anecdotal support, such as a creative idea you provided.

• Don’t be defensive. Criticism from your manager should be expected, so try not to argue or snap back when confronted with a legitimate critique.

• Deliver a surprise. If you can, try to accomplish a project, even a minor one, right before the performance review is scheduled in order to give yourself a last-minute boost.

• Show some personality. Managers are more inclined to reward employees they like, so ingratiating yourself with the boss can’t hurt.

• Be creative. If you’ve excelled in your performance review but the company’s finances won’t allow for a salary increase, consider some alternative forms of compensation, such as more vacation days or flexible work schedules.

While this advice cannot guarantee a successful performance review, the tips provided here can serve as a guideline for how to approach year-end, and even day-to-day, interactions with management.

(For other ideas to consider for your performance review, revisit the tips offered in our previous How to Get a Raise.)

Structuring a Proper Review for Your Employees
Ideally, a manager handles employee performance issues as they arise throughout the year, with the performance review serving as a formal discussion of an employee’s progress over the preceding 12 months. It also looks forward to the future, determining what steps should be taken to enhance career development in the next year.

Monster.com offers the following tips for managers organizing their annual reviews:

• Start the review by focusing on an employee’s primary, core duties and evaluating how well the specific areas of responsibility were handled. Emphasize concrete examples of both strengths and flaws.

• Examine each goal that was set at the start of the performance period and the level to which it was accomplished. Try to identify what helped the employee succeed versus what served as an obstacle to success.

• Try to maintain an open mind and remain flexible about changes in the discussion. Pre-determined points should serve as a guideline for the meeting without hindering the employee’s ability to voice his or her opinions.

• Keep your criticism or feedback constructive. Avoid making generalizations about the employee’s personality or attitude, and stick to facts.

• Identify any opportunities for employee support or additional training, with criticism focused on professional development and career growth.

• Besides evaluating the previous year’s performance, make sure to look ahead toward the future and establish new goals and a timetable for accomplishing them over the next performance period.

The Argument Against Performance Reviews
Some critics question the validity of performance reviews, claiming that they cause unnecessary tension in the workplace, rarely yield reliable improvement and generally work to impede the progress they are intended to generate. Part of this dispute is attributed to the one-sidedness of the evaluation process, which critics assert lends too much power to managers and consequently erodes the employee-boss relationship.

According to the Wall Street Journal‘s Samuel Culbert, having managers conduct performance reviews “leads to inauthentic behavior, daily deception and a ubiquitous need for subordinates to spin all facts and viewpoints in directions they believe the boss will find pleasing. It defeats any chance that the boss will hear what subordinates actually think.”

He goes on to claim that the structure of reviews precludes any chance of objective performance measurement and that compensation is based more on market forces than direct employee performance. His solution is to replace the review with a reciprocal “performance preview,” in which a group is judged by their overall effort, including that of the manager overseeing the team.

This sentiment is echoed by Jim Heskett, of Harvard Business School, who worries that performance reviews have too many objectives, thus rendering their ultimate purpose unclear to both managers and employees. He raises several questions about reviews: “Should their objectives be scaled back to just one or two? Should they be disengaged from the determination of compensation, and if so, how?”

Although most companies that conduct staff evaluations will probably stick with the traditional performance review model for the time being, the rising tide of criticism may lead to reforms in the process, so that future reviews may be quite unlike the one you’re expecting for the start of 2009.

Resources

10 Ways To Make Your Performance Review Pay Off – Even In A Recession
by Pamela Skillings
Escape from Corporate America, Nov. 13, 2008

Effective Performance Reviews: a Step-by-Step Plan to Make Them More Meaningful
by Joanne Murray
Monster.com, 2007

Get Rid of the Performance Review
by Samuel A. Culbert
The Wall Street Journal, Oct. 20, 2008

What’s to Be Done About Performance Reviews?
by Jim Heskett
HBS Working Knowledge, Nov. 27, 2006