Most managers hate giving performance reviews. They require tons of effort to do well, and people are usually terrible at giving feedback frequently so they end up surprising their direct reports with things that are delivered for the first time in a formal review. Even worse, some managers will try to avoid tough and awkward conversations by any means, so they just provide a dull and useless review. I've been guilty of this myself, and it took me a long time to get my act together and find a way to deliver performance reviews that are helpful for everyone.

In my experience, good performance reviews start before someone accepts a job or new role. It begins with a document that clearly articulates the mission of the role and the outcomes you expect the person to deliver in that role. I stole this from Who: The A Method for Hiring by Geoff Smart. It's a good book I recommend to most Founders and People Leaders. (Here's a synopsis with an example of the MOC form I referenced.) In the book, the document serves as a mechanism to better recruit and screen candidates, but I actually think it’s even more useful as a tool for ongoing management and aligning expectations for what success looks like. It also solves for the problem of someone accepting a job thinking it's one thing, but it's really something entirely different (mismatched expectations are frequently a reason why employees do not make it). Here's an example of a scrubbed version of a Head of Business Development expectations document:

Now you and your direct report have a source of truth you can continually reference to understand how they're performing. The cadence that I think works best for performance reviews is two formal ones per year, and informal ones every other month in between (ie four informal reviews throughout the year and two formal reviews). Monthly is too frequent and doesn't allow enough breathing room to get things done. During the informal check-ins the manager and direct report should take this document and mark every outcome as either Green (on track or exceeding), Yellow (behind plan), or Red (Code Red!). The informal check-ins are also an important time to recalibrate the document. Company priorities shift and the outcomes should change over time, and sometimes the mission of the role evolves as well.

If this process is happening at least two times before a formal performance review, nothing should be a surprise. As a manager you are clearly articulating how you think someone is performing in the role relative to your mutually agreed upon expectations, and as a direct report you know where you stand and what you need to improve upon to flourish.

Before the formal performance review, I take this document and go to town. I'll start with a 1-2 paragraph high-level assessment of the person's performance. This is the synopsis of key takeaways from the previous two quarters. Then I will go through the Outcomes and highlight each bullet as green, yellow, or red, and provide commentary (usually 1-3 sentences) with my reasoning. Sometimes an outcome may be Red but it's not the person's fault (eg a pandemic eviscerated your market). Sometimes it may be green but it's because something happened in the market and can't be attributed to the work that was done (eg a pandemic created unforeseen tailwinds). It's important to call these out in the commentary.

After this I will highlight several things that the person did well since the last performance review in a What else did Person do well? section. These might be tactical wins that are worth calling out, or specific things the person has been working to level up for some time. It's an opportunity to articulate the things that stand out that are special about the performance and person. After this section comes the What can Person improve? Here's an opportunity to dive into 2-4 elements of the job that are not listed in the Outcomes section. It can range from "being cognizant of burnout" to "being more succinct while speaking in public" and "getting in the weeds to build better knowledge of the function."

Then I will link to a document containing the person's 360 Feedback from their peers and direct reports. Their direct reports feedback will be anonymized and organized thematically, but feedback from their peers should not be anonymous if the person is an executive (this is one of the hallmarks of a high-functioning leadership team). Under the link I will write a paragraph of my takeaways from the 360 feedback. Does it align with my assessment? Where is it different? What is surprising? Do not read the 360 feedback before writing your review otherwise it will bias you and you will cheat by using other people's feedback to inform your own! And lastly, I create a Next Steps section that has a list of questions for the person to reflect on that serves as the agenda for conversation during the review. To better visualize this, here's what a document would look like for someone who has been with the company for at least one performance review cycle:

This entire document is delivered to the direct report before the scheduled performance review, ideally 2-3 days. If you've done your job right, there really should not be any surprises outside of what they may read in the 360 feedback. Now when you meet for the formal performance review you aren't reading through a document or notes on feedback, you are having a conversation about your report's reaction to the feedback you so thoughtfully and thoroughly crafted. Almost every time I've done this, the conversations have been short and sweet. No surprises makes for easy, constructive, and delightful performance reviews. That's right, delightful. This strengthens your relationship with your direct reports. Most managers they've worked with over the course of their career haven't put in half the effort or thought to develop real professional relationships that you just delivered in a single performance review cycle.

Sometimes, there are surprises. Sometimes there's just a total disconnect between you and your report. You may have poorly articulated feedback in an informal review beforehand. They may strongly disagree with your assessment, especially subjective ones (this happens, and it's part of the conversation and this can be very healthy). Agreement on the objective outcomes should be clear unless something is very off between you and your report, in which case someone will likely head towards the exit soon. 

When the meeting is over, ask your report to come to your next 1-1 with a draft of updated expectations and their own version of their Areas of Improvement. This is a critical point: for senior people, expectations are driven by you at the point of hire, but thereafter it is most useful for the employee to take the lead on this themselves. Over the next week work with them to mutually agree on the updated expectations and the areas of improvement that are most important between that day and the next formal performance review. Then in your next informal and formal performance reviews you should revisit the Areas of Improvement with your commentary on their progress. 

Voila! The amount of effort that is required to do this reasonably well may seem daunting, but it's worth it. Good management is hard work, and the price of failing here means you won't be able to assemble and retain the high-performing team you need to succeed. In my experience, it makes life an order of magnitude easier and more enjoyable.

It took me years to get to this process which is by far the best one I've used in my career. It is largely geared towards working with executive and leadership teams (ie people that should be further along in their career and have real professional maturity). Many mentors helped me get there, and I owe a lot to my executive coach Jason Gore in helping me to flesh this out (especially the green, yellow, red assessment cadence and the Next Steps section) and Cody Forrester who would continuously give me feedback on how to improve my performance reviews over many years. It's an always-evolving process, but I do hope you find this as helpful as I have.

Most managers hate giving performance reviews. They require tons of effort to do well, and people are usually terrible at giving feedback frequently so they end up surprising their direct reports with things that are delivered for the first time in a formal review. Even worse, some managers will try to avoid tough and awkward conversations by any means, so they just provide a dull and useless review. I've been guilty of this myself, and it took me a long time to get my act together and find a way to deliver performance reviews that are helpful for everyone.

In my experience, good performance reviews start before someone accepts a job or new role. It begins with a document that clearly articulates the mission of the role and the outcomes you expect the person to deliver in that role. I stole this from Who: The A Method for Hiring by Geoff Smart. It's a good book I recommend to most Founders and People Leaders. (Here's a synopsis with an example of the MOC form I referenced.) In the book, the document serves as a mechanism to better recruit and screen candidates, but I actually think it’s even more useful as a tool for ongoing management and aligning expectations for what success looks like. It also solves for the problem of someone accepting a job thinking it's one thing, but it's really something entirely different (mismatched expectations are frequently a reason why employees do not make it). Here's an example of a scrubbed version of a Head of Business Development expectations document:

Now you and your direct report have a source of truth you can continually reference to understand how they're performing. The cadence that I think works best for performance reviews is two formal ones per year, and informal ones every other month in between (ie four informal reviews throughout the year and two formal reviews). Monthly is too frequent and doesn't allow enough breathing room to get things done. During the informal check-ins the manager and direct report should take this document and mark every outcome as either Green (on track or exceeding), Yellow (behind plan), or Red (Code Red!). The informal check-ins are also an important time to recalibrate the document. Company priorities shift and the outcomes should change over time, and sometimes the mission of the role evolves as well.

If this process is happening at least two times before a formal performance review, nothing should be a surprise. As a manager you are clearly articulating how you think someone is performing in the role relative to your mutually agreed upon expectations, and as a direct report you know where you stand and what you need to improve upon to flourish.

Before the formal performance review, I take this document and go to town. I'll start with a 1-2 paragraph high-level assessment of the person's performance. This is the synopsis of key takeaways from the previous two quarters. Then I will go through the Outcomes and highlight each bullet as green, yellow, or red, and provide commentary (usually 1-3 sentences) with my reasoning. Sometimes an outcome may be Red but it's not the person's fault (eg a pandemic eviscerated your market). Sometimes it may be green but it's because something happened in the market and can't be attributed to the work that was done (eg a pandemic created unforeseen tailwinds). It's important to call these out in the commentary.

After this I will highlight several things that the person did well since the last performance review in a What else did Person do well? section. These might be tactical wins that are worth calling out, or specific things the person has been working to level up for some time. It's an opportunity to articulate the things that stand out that are special about the performance and person. After this section comes the What can Person improve? Here's an opportunity to dive into 2-4 elements of the job that are not listed in the Outcomes section. It can range from "being cognizant of burnout" to "being more succinct while speaking in public" and "getting in the weeds to build better knowledge of the function."

Then I will link to a document containing the person's 360 Feedback from their peers and direct reports. Their direct reports feedback will be anonymized and organized thematically, but feedback from their peers should not be anonymous if the person is an executive (this is one of the hallmarks of a high-functioning leadership team). Under the link I will write a paragraph of my takeaways from the 360 feedback. Does it align with my assessment? Where is it different? What is surprising? Do not read the 360 feedback before writing your review otherwise it will bias you and you will cheat by using other people's feedback to inform your own! And lastly, I create a Next Steps section that has a list of questions for the person to reflect on that serves as the agenda for conversation during the review. To better visualize this, here's what a document would look like for someone who has been with the company for at least one performance review cycle:

This entire document is delivered to the direct report before the scheduled performance review, ideally 2-3 days. If you've done your job right, there really should not be any surprises outside of what they may read in the 360 feedback. Now when you meet for the formal performance review you aren't reading through a document or notes on feedback, you are having a conversation about your report's reaction to the feedback you so thoughtfully and thoroughly crafted. Almost every time I've done this, the conversations have been short and sweet. No surprises makes for easy, constructive, and delightful performance reviews. That's right, delightful. This strengthens your relationship with your direct reports. Most managers they've worked with over the course of their career haven't put in half the effort or thought to develop real professional relationships that you just delivered in a single performance review cycle.

Sometimes, there are surprises. Sometimes there's just a total disconnect between you and your report. You may have poorly articulated feedback in an informal review beforehand. They may strongly disagree with your assessment, especially subjective ones (this happens, and it's part of the conversation and this can be very healthy). Agreement on the objective outcomes should be clear unless something is very off between you and your report, in which case someone will likely head towards the exit soon. 

When the meeting is over, ask your report to come to your next 1-1 with a draft of updated expectations and their own version of their Areas of Improvement. This is a critical point: for senior people, expectations are driven by you at the point of hire, but thereafter it is most useful for the employee to take the lead on this themselves. Over the next week work with them to mutually agree on the updated expectations and the areas of improvement that are most important between that day and the next formal performance review. Then in your next informal and formal performance reviews you should revisit the Areas of Improvement with your commentary on their progress. 

Voila! The amount of effort that is required to do this reasonably well may seem daunting, but it's worth it. Good management is hard work, and the price of failing here means you won't be able to assemble and retain the high-performing team you need to succeed. In my experience, it makes life an order of magnitude easier and more enjoyable.

It took me years to get to this process which is by far the best one I've used in my career. It is largely geared towards working with executive and leadership teams (ie people that should be further along in their career and have real professional maturity). Many mentors helped me get there, and I owe a lot to my executive coach Jason Gore in helping me to flesh this out (especially the green, yellow, red assessment cadence and the Next Steps section) and Cody Forrester who would continuously give me feedback on how to improve my performance reviews over many years. It's an always-evolving process, but I do hope you find this as helpful as I have.