Performance reviews can be anxiety-inducing moments for employees. As they walk into that meeting room, their hearts race, palms get sweaty, and they hope for the best. Why? Because performance reviews carry weight. They’re not just about metrics and goals; they’re about validation, recognition, and career progression. Employees nervously hope to hear positive feedback, acknowledgment of their hard work, and perhaps even a pat on the back. They yearn for the assurance that their efforts matter, that they’re on the right track, and that their contributions are valued.

There is no question that performance reviews are a critical aspect of employee management. When done well, they can motivate, guide, and enhance individual and team performance. However, leaders often fall into common traps that hinder the effectiveness of these reviews.

10 Common mistakes leaders make in performance reviews

Most leaders have the right intent, however conducting effective performance reviews that matter require a lot more than the right attitude. Careful planning is needed to ensure that the performance review can be mutually beneficial. The following outlines 10 common pitfalls and how to avoid them.

1. Serving as Judge and Jury

Mistake: The traditional performance review is a top-down process where the boss evaluates employees’ behaviour and achievements. This one-way approach can create defensiveness and hinder open dialogue.

Solution: Consider making performance reviews a two-way process. Encourage employees to provide self-appraisals before the meeting. Discuss their self-assessment alongside your evaluation. Remember, you’re evaluating results, not people.

2. Lack of preparation

Mistake: Failing to prepare adequately for the review can lead to vague feedback and missed opportunities for growth. It also sends a clear message that the employee is not valued.

Solution: Leaders should review performance data, gather specific examples, and set clear objectives before the meeting. They should speak to key stakeholders and enter the meeting with an open mind and the right intent.

3. Focusing Solely on Negatives

Mistake: Some leaders only spend time emphasising weaknesses and areas for improvement, neglecting positive feedback.

Solution: Balance constructive criticism with recognition of strengths. Acknowledge achievements and celebrate progress. A balanced approach motivates employees to improve.

4. Involving the Wrong People

Mistake: Managers often conduct reviews without input from peers or subordinates.

Solution: Implement a 360-degree review system. Involve colleagues, direct reports, and even self-assessments. Multiple perspectives provide a holistic view of performance and work to remove rater bias.

5. Surprising Employees

Mistake: Springing surprises during performance reviews can lead to frustration and anxiety.

Solution: Regularly communicate expectations and provide ongoing feedback. Performance reviews should not reveal new information; they should summarise what employees already know and provide an opportunity to deep dive with feedback.

6. Tying Salary Bumps to the Review

Mistake: Linking performance reviews directly to salary increases can create tension.

Solution: Decouple performance discussions from compensation conversations. Discuss salary adjustments separately, based on market rates, individual contributions, and organisational budgets.

7. Using Vague Language

Mistake: Some reviews rely on generic terms like “satisfactory” or “needs improvement,” lacking specific examples.

Solution: Be specific. Describe behaviours, accomplishments, and areas for growth. Use quantifiable metrics wherever possible. Concrete feedback guides improvement.

8. Ignoring Development Opportunities and using generic language

Mistake: Focusing solely on past performance without discussing future growth opportunities. Using phrases like “good job” or “needs improvement” lack specificity.

Solution: Use performance reviews to identify development needs. Set clear goals for skill enhancement, training, and career progression. Leaders should provide concrete examples and actionable feedback. For instance, instead of saying, “You need to communicate better,” they could say, “During team meetings, consider summarising key points to ensure everyone is on the same page.”

9. Not Documenting the Review

Mistake: Failing to document performance discussions can lead to misunderstandings later.

Solution: Maintain detailed records. Document agreed-upon goals, feedback, and action plans. Refer back to these notes during subsequent reviews.

10. Recency bias and rating inflation or deflation

Mistake: Relying on memory for performance assessments can lead to biases and inaccuracies. Furthermore, relying too heavily on recent events or incidents can skew the evaluation. Some leaders also hesitate to give honest ratings, leading to inflated scores. Others may unfairly deflate ratings due to personal biases.

Solution: Collect data throughout the year. Regularly update performance records. Use objective evidence to support your evaluations. Leaders should consider the entire performance period and avoid overemphasising recent successes or failures. Consistent and fair evaluation criteria are essential.

6 things leaders can do today to improve performance reviews

Sure, to some leaders it might seem like another thing on the endless ‘to do’ list, but to employees; they are essential. Feedback holds both intrinsic and extrinsic value and research across various fields shows that individuals become high performers by identifying areas for improvement and having a plan to execute.

Here are 6 things leaders can start doing today to create a positive and productive performance review:

  1. Preparation Matters: Adequate preparation is crucial. Leaders should gather relevant data, assess performance holistically, and avoid making assumptions or judgments. A well-prepared review fosters meaningful conversations.
  2. Allocate Sufficient Time: Rushed reviews hinder effective communication. Allocate ample time for the conversation to discuss performance goals, achievements, and growth areas comprehensively. Be present when you are present!
  3. Negotiate Expectations and Agreements: Engage in a dialogue with employees to set clear expectations and create performance agreements. Collaboratively define goals and ensure alignment.
  4. Embrace Feedback: Constructive feedback is essential. Leaders should provide specific examples, acknowledge strengths, and offer actionable suggestions for improvement. A growth-oriented mindset encourages employees.
  5. Empower Employees: Encourage employees to self-assess and reflect on their performance. Empower them to take ownership of their development. Leaders who empower foster trust and motivation.
  6. Listen Actively: Listening with empathy and an open heart is transformative. Understand employees’ perspectives, address concerns, and demonstrate genuine interest in their growth.

Positive reviews contribute to engaged employees

Effective performance reviews require thoughtful planning, ongoing communication, and a growth-oriented mindset. It is important for leaders to avoid these common mistakes to create a positive impact on employee development, engagement, and organisational success.

Remember, performance reviews are not just about evaluation; they are opportunities for growth and alignment. Approach them with empathy, clarity, and a commitment to continuous improvement. Leaders who invest time and effort in conducting effective performance reviews not only enhance individual performance but also contribute to a thriving and motivated workforce.

It is at performance review time that the emotionally intelligent skills of a leader are tested. Collaborative goal setting, listening from the heart and a partnership mindset are strong contributors to turning the dreaded review into something that is valued and even looked forward to.   

Further information

Ai Group also offers a range of extensive training courses to support leaders on their development journey. Ai Group has an extensive Optimising and Managing Performance resource toolkit to support members in all facets of performance management. For assistance with your workplace matters, Members of Ai Group can contact us or call our Workplace Advice Line on 1300 55 66 77 for further information.

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Georgina Pacor

Georgina is Senior HR Content Editor – Publications at Ai Group. She is an accomplished Human Resource professional with over 25 years of generalist and leadership experience in a broad range of industries including financial services, tourism, travel, government and agriculture. She has successfully advised and partnered with senior leaders to implement people and performance initiatives that align to business strategy. Georgina is committed to utilising her experience to create resources that educate and engage and is passionate about supporting members to optimise an inclusive workforce culture that drives performance.