A performance review should summarize an ongoing conversation, not create a once-a-year surprise.
Imagine a hockey coach waiting until the end of the season to tell players what they were doing well, where they were struggling, or how the game plan had changed. It would be unthinkable. Coaches provide feedback throughout the season, while players can still adjust their performance. Yet many organizations still expect one annual performance review to do an entire year’s worth of coaching. Employees may see reviews as subjective or disconnected from day-to-day work. Managers often experience them as an administrative exercise that requires fitting a year of performance into a form and a single conversation.
The research supports these concerns. Only two in ten employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. Just 14% say their performance reviews inspire them to improve (Wigert & Harter, 2017).
But the answer is not necessarily to eliminate performance reviews. Employees still need clear expectations, and leaders need a consistent way to recognize contributions, address concerns, and make decisions about compensation and advancement. The answer is to stop treating the annual review as the entire performance-management process.
Set Clear Expectations
Before evaluating performance, make sure the employee understands what successful performance looks like. Only 47% of employees strongly agree that they know what is expected of them at work. Employees who are involved in setting their goals are also twice as likely to report having clear expectations (Wigert & Barrett, 2024).
For most SMEs, this does not require a complicated scorecard. Managers and employees should agree on:
- the employee’s three to five most important priorities;
- the results and behaviours expected;
- how progress will be assessed; and
- the resources or support required.
Simple test: Ask the manager and employee to separately list the employee’s top three priorities. If the lists differ significantly, the first issue may be unclear expectations rather than a lack of effort.
Replace the Annual Event with Regular Check-ins
Cappelli and Tavis (2016) argue that traditional reviews place too much emphasis on assessing past performance and not enough on improving current and future performance.
A short monthly or quarterly check-in can help close that gap. These conversations should address five questions:
- What has gone well?
- Where are you running into difficulty?
- Have any priorities changed?
- What support or decisions do you need?
- What will you focus on next?
Meaningful feedback is more valuable when it is provided close enough to the work for the employee to act on it. Employees who receive regular feedback are also more likely to be engaged and motivated to do outstanding work (McLain & Nelson, 2024).
Focus feedback on the work, not the person
Compare these two statements:
“You need to be more strategic.”
or
“In your next proposal, include the longer-term operational impacts, key risks, and at least one alternative.”
The first labels the employee but provides little direction. The second identifies what needs to change. Feedback is not automatically helpful. A major meta-analysis found that although feedback improved performance on average, more than one-third of the interventions studied reduced performance. Feedback was less effective when it focused attention on the individual rather than the task (Kluger & DeNisi, 1996).
Effective feedback should identify the specific situation, observable behaviour, business impact, expected standard, and next action.
Make the Formal Review a Summary
If an employee first learns about a significant concern during the annual review, the process has failed both the employee and the organization. Concerns should be addressed when they occur, giving the employee an opportunity to respond and improve. Positive contributions should also be recognized when they happen.
The formal review can then summarize:
- results and contributions;
- behaviours and working relationships;
- strengths;
- improvement or development priorities;
- relevant barriers or changing circumstances; and
- agreed actions and support.
Considering context does not mean avoiding accountability. Performance is influenced by individual effort, but also by leadership, resources, technology, work design, and organizational systems (Duda et al., 2025).
The Bottom Line
SMEs do not need a complex performance-management system. They need clear expectations, regular conversations, useful feedback, and consistent follow-through.
Keep the formal review, but stop expecting it to manage an entire year of performance. A successful process should ensure that every employee can answer three questions:
- What is expected of me?
- How am I doing?
- What should I do next?
Ready to put these ideas into practice? Click here to download our Performance Management Quick Start Guide for five practical changes you can make this month.
To learn more about the variety of services offered by RLB People, contact the team at people@rlb.ca or visit their website at people.rlb.ca.
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References
Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard Business Review, 93(4), 40–50. https://hbr.org/2015/04/reinventing-performance-management
Cappelli, P., & Tavis, A. (2016). The performance management revolution. Harvard Business Review, 94(10), 58–67. https://hbr.org/2016/10/the-performance-management-revolution
Cioca, I., & Gifford, J. (2022). Performance feedback: An evidence review. Practice summary and recommendations. Chartered Institute of Personnel and Development. https://www.cipd.org/globalassets/media/knowledge/knowledge-hub/evidence-reviews/performance-feedback-evidence-review_tcm18-111378.pdf
Duda, J., Flynn, J., Cantrell, S., Scoble-Williams, N., & Sanford, A. (2025, March 23). Reinventing performance management processes won’t unlock human performance. Here’s what will. Deloitte Insights. https://www.deloitte.com/us/en/insights/topics/talent/human-capital-trends/2025/employee-performance-management-optimization-effective-strategy.html
Wigert, B., & Harter, J. (2017). Re-engineering performance management. Gallup. https://www.gallup.com/workplace/238064/re-engineering-performance-management.aspx
Kluger, A. N., & DeNisi, A. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. Psychological Bulletin, 119(2), 254–284. https://doi.org/10.1037/0033-2909.119.2.254
Mann, A., & Wigert, B. (n.d.). How managers can excel by really coaching their employees. Gallup. https://www.gallup.com/workplace/231650/managers-excel-really-coaching-employees.aspx
McLain, D., & Nelson, B. (2024, January 19). How effective feedback fuels performance. Gallup. https://www.gallup.com/workplace/357764/fast-feedback-fuels-performance.aspx
Wigert, B., & Barrett, H. (2024, May 6). 2% of CHROs think their performance management system works. Gallup. https://www.gallup.com/workplace/644717/chros-think-performance-management-system-works.aspx
