There are two business topics that seem to bring out the best and 9yes) the worst in executives: 360º feedback and performance reviews.

Here is an excerpt from an article written by Rebecca Knight for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

*     *     *

It’s performance review season, and you know the drill. Drag each of your direct reports into a conference room for a one-on-one, hand them an official-looking document, and then start in with the same, tired conversation. Say some positive things about what the employee is good at, then some unpleasant things about what he’s not good at, and end — wearing your most solicitous grin — with some more strokes of his ego. The result: a mixed message that leaves even your best employees feeling disappointed. But if you take the right approach, appraisals are an excellent opportunity to reinforce solid performers and redirect the poor ones.

What the Experts Say


For many employees, a face-to-face performance review is the most stressful work conversation they’ll have all year. For managers, the discussion is just as tense. “What a performance appraisal requires is for one person to stand in judgment of another. Deep down, it’s uncomfortable,” says Dick Grote, author of How to Be Good at Performance Appraisals. Evaluating an employee’s job performance should consist of more than an annual chat, according to James Baron, the William S. Beinecke Professor of Management at Yale School of Management. Performance management is a process, he says. “Presumably you’re giving a tremendous amount of real-time feedback, and your employees are people you know well. Hopefully your relationship can survive candid feedback.” No matter what kind of appraisal system your company uses, here are several strategies to help you make performance review season less nerve-racking and more productive.

Set expectations early


The performance review doesn’t start with a sit-down in the spare conference room. You must be clear from the outset how you’ll evaluate your employees. Grote suggests holding “performance planning” sessions with each of your direct reports at the beginning of the year, to discuss that person’s goals and your expectations. “You’ll see immediate improvement in performance because everyone knows what the boss expects,” he says. “And it earns you the right to hold people accountable at the end of the year.” Listen carefully to your employees’ personal ambitions, as it will inform the way you assess their work. “Oftentimes managers are evaluating performance without necessarily knowing what that person’s career aspirations are. We often assume that everyone wants to be CEO. But that’s not always the case,” says Barron. Understanding what your direct reports want from their careers will help you figure out ways to broaden their professional experiences.

Lay the groundwork

About two weeks before the face-to-face review, ask your employee to jot down a few things he’s done over the last year that he’s proud of. This will both help refresh your memory, and “will put a positive focus on an event that is so often seen as negative,” says Grote. Next, go over other notes you’ve kept on your employee over the year: a well-executed project; a deadline missed; the deft handling of a difficult client. Finally, ask for feedback from others in the company who work closely with your employee. “The larger number of independent evaluations the better,” says Barron. About an hour before the meeting, give your employee a copy of his appraisal. That way, he can have his initial emotional response — positive or negative — in the privacy of his own cubicle. “When people read someone’s assessment of them, they are going to have all sorts of churning emotions,” says Grote. “Let them have that on their own time, and give them a chance to think about it.” Then with a calmer, cooler head, the employee can prepare for a rational and constructive business conversation.

Set a tone


Too often the face-to-face conversation takes the form of a “feedback sandwich:” compliments, criticism, more niceties. But because there’s no single, clear message this approach demoralizes your stars and falsely encourages your losers. Instead, pick a side. “Most people are good solid workers, so for the vast majority, you should concentrate exclusively on things the person has done well,” says Grote, adding that this method tends to motivate people who are already competent at their jobs. For your marginal workers, however, do not sugarcoat bad news. Performance reviews are your chance to confront poor performers and demand improvement. “People are resilient,” says Grote. “As time goes on, that person is not going to get a promotion and not going to get a raise…You’re not doing this person any favors by [avoiding their deficiencies].”

Constructively coach 


After discussing the strengths and achievements of your solid performers, ask them how they feel about how things are going. “In most cases you’re dealing with mature adults and you’ll elicit their honest concerns,” says Grote. For both solid and poor performers, frame feedback in terms of a “stop, start, and continue” model, suggests Barron. What is the employee doing now that is not working? What are they doing that is highly effective? What actions should they adopt to be more so? By focusing on behaviors not dispositions, it takes the personal edge out of the conversation. Give specific advice and targeted praise. “Don’t say things like: ‘You need to be more proactive.’ That doesn’t mean anything. Say something like: ‘You need to take more initiative in calling potential sales leads.'” Similarly, “Saying: ‘You’re an innovator’ is nice but it’s helpful to know exactly what they’re doing that reflects that,” says Baron.

Hold your ground


The hot button issues associated with performance reviews are money and rank. If your company allows it, separate any talk of compensation from the performance review. “But if you must, do not save the salary information for the end of the conversation,” says Grote, “otherwise there’ll be an invisible parrot above the employees’ head squawking: how much? throughout the entire discussion.” Rank is another place for potential bruised feelings. A majority of companies require managers to rate their employees — often on a scale of 1-5. Your goal is go over the data, and make a judgment call.

Remember: the 1-5 system is not analogous to the A-F grading scheme in school; most employees will get the middle rank, a 3. This might leave some employees feeling let down, thinking they’re merely “average.” Don’t cave in. “In the corporate world, you’re dealing with a highly selective group,” says Grote. “The rules of the game have changed. In school, a C was mediocre, but a 3 in the working world means they’re meeting expectations. They’re shooting par.” Conveying that message is a leadership challenge. “People can accept it rationally but it may be hard to accept viscerally,” he says. “This is why it’s so important to hold a performance planning meeting at the outset. If they hit their targets, they are a 3. It’s a goal.”

Knight then recommends “Principles to Remember” and provides two mini-case studies that illustrate them. To read the complete article, please click here.

*     *     *

Rebecca Knight is a freelance journalist in Boston. She has been published in The New York Times, USA Today, The Financial Times, and The Economist.