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The Performance Evaluation Cycle

The Performance Evaluation Cycle


Many people look forward to annual performance reviews the way they look forward to oil changes and tune-ups. Sure, these are standard operating procedures, but they can be a hassle and they could reveal bad news. As a result,  reviews are often done poorly. They’re treated as an afterthought and rushed when the time comes. Or they’re not done at all.

When done effectively, reviews provide employees with feedback about their performance, clear expectations for performance going forward, and goals for the next year. And they give employers the documentation they need to justify pay increases, decreases, or other employment decisions. Really, though, reviews should be just one part of a larger performance management process.

The purpose of the evaluation process is to align individual employee goals with departmental and company goals. It links what an employee is doing on a day-to-day basis with the company’s long-term strategy.

Performance management is an ongoing process, with feedback and coaching happening regularly throughout the year. A well-oiled evaluation process helps the business run smoothly. It improves morale, builds trust and loyalty, and increases productivity.

And if coaching is done on a regular basis, there should be no surprises when it comes time for performance evaluations.

Steps of the Performance Management Cycle

The performance management cycle ensures that you have a highly performing organization by maintaining or continually improving individual performance.

It begins with performance planning, in which the employee and their supervisor collaborate to develop a plan that details the goals and objectives for the coming review period. This step is also a good time for the employee to discuss their career goals and aspirations.

Throughout the review period, there should be ongoing coaching aimed at continuous improvement, and managers should provide regular feedback and support. All of this is critical to ensure that the employee understands what is expected of them and whether or not they are meeting their goals.

Prior to the review, the manager should assess the employee’s performance based on the employee’s completion of their goals and on other objective, job-related criteria. These criteria should be understood by the employee in advance.

Finally, the performance review should be completed based on an assessment of how well the employee completed their performance goals and an evaluation of performance in core competency areas.


Most performance evaluations use a rating system. Rating scales can be numeric, such as a scale from one to five. They can correspond with a description such as “satisfactory,” “excellent,” or “meets expectation.” Or they can describe how often the behavior is exhibited — “consistently,” “most of the time,” or “rarely,” for example.

If you use ratings, clearly define each level, and make sure that managers are trained in the system and that they understand what performance at each level looks like so that the levels are applied consistently.

“Throughout the review period, there should be ongoing coaching aimed at continuous improvement, and managers should provide regular feedback and support. All of this is critical to ensure that the employee understands what is expected of them and whether or not they are meeting their goals.”

Goal Completion and Evaluation

In addition to competency and rating information, the manager review should have information about how well the employee completed their goals from the last cycle. It helps to have SMART goals—goals that are specific, measurable, achievable, relevant, and time-bound. Be sure that projects the employee completed are captured in the review and that any feedback about them is given.

You’ll also want to capture general feedback about the employee’s performance. Assess performance and don’t sugarcoat your written evaluation. It is amazing how often we hear that a client wants to terminate a poor performer, but the employee has glowing reviews on file. Leaving out shortcomings doesn’t help an employee develop and could hurt the company later in the event that termination becomes necessary.


The purpose of the self-review is make employees think about their own performance and to take a critical look at how they did over the review period. Self-reviews take advantage of the employee’s familiarity with their day to day work. They also highlight the parts of performance that are important to the employee.

In addition, the self-review enables the manager to see if employees have an accurate understanding of their own job performance. It also enables a manager to ensure that no key accomplishments have been left out of the manager review.

One caveat: self-review should not be used as a substitute for the manager’s review.  Evaluations have much less value when managers don’t give their own input to employees.

Concluding Thoughts

Be specific with your input. Don’t tell an employee they are very creative. Instead, tell them that it was great when they thought of that new way to improve efficiency around the office. Rather than tell an employee you enjoy their positive attitude, tell them that it’s great when they greet everyone with a smile and offer to help out when others are swamped.
For your poor performers, the review is an opportunity to demand that things improve. Remember that you want to be specific, and you want to focus on behavior, not the individual.

Finally, you’ll want to finalize any paperwork related to the review and ensure that it ends up in the employee’s personnel file.