Aug 25, 2023
6 min read

How to Conduct a Performance Review [a Manager's Guide]

In this article:

With the evolving work dynamics, many organizations face the challenge of conducting a performance review to boost employee performance. Research from Gallup revealed that only 14% of employees agree that their performance reviews motivate them to do better in their jobs. 

To prevent this in your organization, you need an effective performance review process. This begins with regular check-ins and ongoing conversations to boost employee engagement and meet their changing needs and career aspirations. 

In this article, we'll explain how to conduct a performance review so you can strengthen relationships with employees and boost their success and performance. 

How to conduct a performance review in 7 steps

How to conduct a performance review in 7 steps

Image source: Freepik

An effective performance review defines the proper review criteria, includes a development plan, and strengthens the manager-employee relationship. In this section, we'll highlight seven key steps that show you how to conduct a performance review correctly.

1. Set performance review criteria and choose a rating scale

When conducting performance reviews, set clear criteria highlighting what an employee should accomplish, including job responsibilities and communication skills. You can use different performance rating scales to get an overall picture of how well the employees perform. Here are some examples:

  • Behavioral rating scale
  • Competency rating scale
  • Peer rating scale
  • Numerical rating scale

2. Prepare all data

data for conduct a performance review

Image source: Freepik

An effective performance review process includes relevant employee data and other necessary information that helps direct the conversation and allows the manager to glean authentic insights regarding employee’s performance from different perspectives.

Before conducting employee performance reviews, ensure you gather data and examples from the following:

  • Past performance appraisals
  • Talent review ratings of a team member 
  • Employee accomplishments
  • Engagement survey responses
  • Hiring documents

3. Inform the employees and explain the importance of a performance review

No one enjoys an impromptu meeting. The same applies to performance reviews. You need to inform your employees about the review process in advance. That gives them time to prepare and gather critical points they want to discuss in the performance review meeting.

To build the needed anticipation and proper expectations, highlight the benefits employees can gain when they engage in performance reviews, such as:

  • Helps employees identify their goals, needs, and challenges
  • Keeps employees engaged at work
  • Boosts employee morale
  • Drives employee success
  • Helps employees identify the steps to take for career growth and development

4. Choose a performance review type

Choose a performance review type

Image source: Freepik

In most cases, employees have different roles and are at different career stages, so choosing the review type is essential when conducting a performance evaluation. These can be:

5. Automate the process with performance review software

Preparing and managing an employee performance review process is a challenging task. For instance, managers would need to spend a lot of time gathering the review's resources, scheduling the meeting, notifying employees of the review meeting, storing relevant evaluation data, and more.

Consider automating the review process with performance management software to save time and reduce the manual burden.

An effective performance management software helps you organize and secure employee information while analyzing feedback and identifying patterns.

6. Schedule a call to discuss results with an employee

After gathering performance review results, what comes next? At this stage, you'll need to schedule a call to discuss results with your employee. Using the received feedback and evaluation data as a basis for discussing results, here are some tips to consider:

  • While discussing an employee's poor performance may be uncomfortable, it's important to highlight this area positively and constructively.
  • Besides providing constructive feedback, you must shift the discussion toward the future. Here, you can highlight new goals and plans for employee professional growth.
  • In some cases, employees may have questions or concerns regarding the evaluation. So, it's essential to be an active listener and make the discussion two-way so the employee feels valued.

7. Create a development plan and check in 

Performance reviews will not be effective if you don't create development plans. 

To create a development plan, you must consider your employees’ and organizational goals and provide resources for achieving them, such as:

  • Certification programs 
  • Coaching and mentorship programs 
  • Online courses 
  • Industry-specific events and conferences

Checking in with employees and keeping the evaluation process continuous is also essential. Consider setting monthly or quarterly meetings rather than an annual performance review to show employees that you're invested in their professional growth and development. 


Performance reviews help employees reach their potential, improve job performance, and boost their professional growth. In turn, this can help your organization achieve business goals and increase employee retention.

However, the performance review process can be challenging if you don't apply the proper steps. Using the performance review tips above, you can have a meaningful performance review conversation with employees during the appraisal meetings.


How do you conduct an effective performance review?

You can conduct effective performance reviews in the following steps:

  • Define the proper performance review criteria
  • Gather all employee performance data
  • Notify employees of a scheduled performance appraisal
  • Choose a performance review type
  • Automate the process using performance review software
  • Schedule a call to discuss results with the employee
  • Create a development plan and maintain a consistent performance review cycle

What are the four stages involved when conducting a performance review?

The four stages involved when conducting a performance review include:

  1. Preparing employee data from survey responses, review ratings, past performance appraisals, etc. 
  2. Gathering feedback 
  3. Analyzing feedback 
  4. Discussing the results with employees and creating development plans 

What are the five performance ratings?

You can rate employee performance using the following categories:

  1. Excellent 
  2. Very good
  3. Satisfactory 
  4. Needs improvement 
  5. Poor

What not to say in a performance review?

When conducting a performance review, avoid the following:

  • Negative language
  • One-sided conversations
  • Comparisons to other employees
  • Providing unconstructive feedback 
  • Not following up on the next steps
What’s Effy software?
Performance review
Easily launch review cycles in your way, track progress.
360 degree feedback
Collect feedback from peers and managers. Identify strength and improvements areas.
Choose templates that are right for you. Start review process in 15 min.
Collaborate effectively with team meeting agenda, action items and meeting notes
Personal development plan
Develop your people by providing them an explicit plan to the next level. Track goals progression.
AI generated insights & Analytics
AI will generate an extended summary for every employee, including top strength, areas to improve and action plan.
Apr 16, 2024
5 min read
15 Work-related Strengths Examples + Tips for Improving Them
Read More
March 26, 2024
4 min read
Employee Evaluation Form: What to Include + Template
Read More
Feb 15, 2024
6 min red
5 Best Staff Appraisal Software for Better Evaluations
Read More
Set up your first
Performance Review with Effy
Use effy for free
Use this template for free