Why and how to prepare an annual performance review

It's the meeting that everyone knows: the famous annual interview. Both awaited and feared by employees, it enables an in-depth review of the employee's career and skills. This management and HR tool is supposed to optimise the employee experience and development thanks to a good preparation.

It has to be said that this is often a sensitive moment, a tricky exercise, for both the manager and the employee. The latter inevitably feels judged, and therefore a little stressed, while the manager must ensure that he or she evaluates in a neutral manner and tells the truth without being too blunt. The exercise seems a little too formal for today's agile companies, which value the culture of feedback and participative management.

The changes in the work environment are precisely the opportunity to take a step back from the annual evaluation interview. What exactly does it consist of? Is it mandatory? How can it be twisted to meet the expectations of employees? Finally, how can we turn this management ritual into a productive exercise?

The annual interview, an optional HR practice

It should be noted that the annual interview, or performance review, is not compulsory for the employer. However, since 1 January 2015 in France, employers have been required to organise a professional interview every two years. The purpose of this meeting is to support the employee in his or her personal development prospects (would he or she like to change jobs? be promoted?) and to identify training needs. During this interview, employees must also be informed about the validation of professional experience (VAE) and the activation of the personal training account (CPF). This is therefore an opportunity for the employee to reflect on his or her professional career and to request a skills assessment. This conversation ends with a written and confidential report. Then, every six years, the professional interview is the subject of a summary interview, also known as a “check up review", which makes it possible to check whether the employee has had the number of interviews planned.

Unlike the professional interview, the annual interview is not mandatory for companies and managers. It is not mentioned in the Labour Code or in collective agreements. However, it has become widespread in large groups and SMEs in order to formally review the situation with their teams, often at the end of the fourth quarter of the year. This privileged moment of exchange usually lasts 1 to 1.5 hours. It provides an opportunity to step back and put day-to-day concerns aside for the duration of the meeting.

It allows :

to look back on the year
to communicate on the company’s situation
to review the objectives
to evaluate skills
to identify topics for improvement
to talk about compensation

It has the merit of aligning the two people involved and to define the missions and objectives of each of them, thus avoiding conflicts and ensuring mutual understanding.

It is also a tool for recognition, since it allows the manager to value successes, to make the employee aware of the importance of his mission. Finally, if it is well conducted, the annual interview should allow the simultaneous progress of the employee's, the manager's and the company's performance.

However, is this classic evaluation process still relevant in a culture of soft skills, feedback and agile management, where everything is moving fast? Hasn't the 12-month interval between two interviews become obsolete? Although 60% of employees believe that the annual appraisal interview is an interesting moment and 57% find it useful (according to a BVA study for Club Média RH, in March 2018), it seems that the practice of the annual interview is still too performance-oriented. Some employees regret the overly formal aspect and would prefer a more open and human discussion between manager and employee.

Towards a reshaping of the annual interview?

A recent study by the media company Welcome to the Jungle highlights the new expectations of employees, surely increased by the health crisis and the widespread use of teleworking. In 2020, 31% of employees surveyed had more expectations of the annual interview than in previous years. New expectations, both in terms of format and content.

In essence, employees also seem to be more demanding. 38% of those surveyed by Welcome to the Jungle would also like the interview to be a space to discuss quality of life at work, professional expectations and future opportunities in the company. They would like to be able to share their opinions, questions or concerns more, and thus understand the interview as a discussion rather than a formal face-to-face meeting in the manager's office. The subjects that are important to them are not always raised. According to a BVA survey conducted for Club Média RH in March 2018, although 80% of employees who have had an interview feel that it has enabled them to make an objective assessment of their year, it has not sufficiently enabled them to discuss career development (55%) or financial issues (31%).

Managers also seem to be willing to change, to better adapt to the expectations of employees and the needs of organisations. According to a Deloitte study published in 2017, 95% of managers are not satisfied with the annual interview system. Too long, inconsistent with new ways of working, this system would no longer be the right instrument to measure employee performance. A continuous, more decentralised and simple process would surely be more appealing to employees, who now work in more complex, constantly changing companies that are moving away from traditional top-down approaches. IBM, Google, Goldman Sachs, Adobe, Deloitte, Accenture, Mazars, Dell and GAP have already done away with traditional annual reviews in favour of alternative solutions and continuous evaluation, closer to employees, throughout the year. The new methods are more informal and collaborative. Employees feel more listened to and therefore more committed and closer to the company's mission.

At Mazars, as at Microsoft, for example, where the culture of continuous feedback is very present, interviews take place every quarter, allowing each person's objectives to be reminded and readjusted, without waiting a year before reacting. The company also encourages employees to give feedback to each other via appropriate platforms. The Popwork tool aims to facilitate exchanges between managers and employees and to support both employees and managers on a daily basis, week after week, in real time.

Finally, to ensure that the exchanges are constructive, Mazars has also trained its employees to give useful and positive feedback. And this regular feedback, whether it comes from employees or managers, has the advantage of making the employee look further into the future.

Tips for a successful annual review meeting

Whether it is annual, quarterly, formal or more flexible, the interview, to work well, must be prepared in advance by both the manager and the team member. The manager must clearly define the exercise and the evaluation criteria to his or her team members for them to be prepared. In any case, the manager or the employer must act with fairness, which means that he must inform them about the evaluation methods. Often a grid form is set up by HR, which the employee has to fill in before the interview with the manager. This helps to prepare and frame the discussion.

If you are conducting the interview as a manager, make sure that you are caring, genuinely listening and honest. Get your message across candour, dare to say things - even what has not been said - but do not forget to be impartial. To do this, think beforehand about the words to use. You are expected to help the other person recognise his or her strengths, to value them and to capitalise on them. To facilitate the discussion, favour open questions:

👉 "How do you feel?"
👉 "What do you need to carry out your mission in good conditions?"
👉 "What do you think worked well?"

Depending on the answers, define together the next objectives by mutual agreement. Finally, do not hesitate to infuse a little fluidity and proximity into the discussion, to focus on the motivational and inspirational aspects without forgetting to address the quality of life at work. Employees will appreciate it! You can also use this opportunity to get feedback on your management style. At the end of your interview, you will draw up a report which will not necessarily be shared with the employee.

On the employee side, it’s a good time to step back. This cannot be done in a few minutes, it is a real introspective exercise. What did you like during the year? Did it bother you? Why did you do it? What were the obstacles encountered? How could you have done better? What do you think are your areas for improvement? What are your prospects for development, how do you see your future? Ask yourself what you expect from this interview. Be ready to confide certain fears. Remember to talk about possible requests for training, promotion, salary increases... while keeping your arguments in mind! Remember to adopt a positive, professional and constructive attitude. Even if certain subjects can be irritating, try not to be defensive.

As you will have realised, the annual appraisal interview gives managers and employees a hard time. Considered too infantilising, outdated and sometimes even ineffective by some, it seems to be in the process of changing and is already evolving in many organisations. According to the 2017 Deloitte study, 90% of companies that have reviewed their performance appraisal system have seen a better level of engagement among their employees. One thing is certain: the success of the interviews depends as much on the involvement of the manager as on that of the employee. It is up to you to find the pace and form of the interviews that will suit the greatest number of people, all generations included!

An ultra simple model to use from tomorrow

All you need to do now is to schedule your annual reviews! For this, we recommend that you adopt a simple method and avoid overly complicated models that are either quickly abandoned after a few weeks or become too complex over time ...

Use the annual performance review template developed by Popwork. Thanks to 3 questions asked beforehand and a 45-minute interview, you will be able to turn all your periodic performance reviews with your team members into a meaningful and efficient conversation.

To receive our annual review template for free 👇