How to run an effective performance review process in 2025

You’ve tabulated the results of your performance review process, gotten all the signatures and approved the associated personal development plans - performance review cycle completed. But before you have too much time to relax and pat yourself on the back, it’s already time to plan for the next cycle. If that thought seems scary to you, maybe it’s time for a performance review of your performance review process.

Whether you are a HR director, a manager, or an employee, there is probably something you’d like to change about the performance review process. Maybe you’re a small team and you’re just emerging into the realm of performance management. Or you’ve recently expanded and looking to scale the process to even more people. No matter the situation, what can you do to make the next review cycle the best one yet? Here’s where to start:

1. Include a self-assessment

The benefits of employee self-assessments are numerous: they increase buy-in and make reviews feel collaborative instead of punitive; they allow both parties to raise valid points and have a conversation instead of a lecture; they ensure that employees are prepared for the conversation and have information to back their performance. If you don’t currently have a method in place to include the employee themselves on their reviews, the only question is; Why?

2. Put it in the calendar and set expectations

Even the most well designed performance review processes can still be difficult at times. They require time, self-reflection and often answering hard question. An easy way to take away some of the worry employees may feel is make sure to provide structure and clear instructions. Start setting reminders well in advance and make sure new employees, who may not even know what a performance appraisal is, know exactly what the process will look like. Not only does this help avoid surprise and defensive attitudes during reviews, it can also help us remember things to include so we aren’t scrambling to complete the review the day before.

3. Consider the whole picture

If you were asked right now to rate the healthiness of your diet over the past 12 months, how representative of the full year do you think your answer would be? You might remember what you had for lunch or that New Year’s resolution to eat more veggies, but chances are your answer will be skewed to account for only the most recent and the most noteworthy. If you are tracking individual goals, gathering 360 feedback or having timely manager check-ins, but not reviewing that information for each review cycle you are leaving precious data on the table. Even if you are just starting to gather that type of data, imagine if you could see a summary of all that information as you consider what you’ve done well and where you need to improve.

After all, the performance appraisal is only one piece of an effective performance management process. Read more about what performance management is here.

4. Stay positive!

A big reason we fear the performance review is a stigma that it is all doom and gloom. Anything we do to relieve this fears can make for a more comfortable and productive conversation. And don’t forget to cover achievements, recognition and good feedback in addition to areas for improvement and feedback. Here are 70 questions and phrases you will find useful when designing performance appraisals.

5. Make it timely

Does your review cycle allow set up employees to success? Just like our New Year’s resolution for eating healthy gets most attention during the end and beginning of the year, if you only measure performance annually, there’s a chance useful feedback on areas for improvement in not delivered in time to make an impact. Many organizations are moving away from the annual review in favor of bi-annual, quarterly or even bi-monthly reviews. Consider if the current cycle you are using gives enough time for reflection as well as being flexible enough to give time for improvement.

6. Make it all align

It can be easy to slip into a mentality that performance reviews are only overhead and red tape. “Can’t I just do my job?” While some employees may just see their job as paycheck and a good performance review as a way to keep collecting it, an engaged employee understands how their individuals efforts are crucial and appreciated in the organization at large. Then, aligning individual goals to larger company objectives can help give work a meaning.

7. Add another performance dimension

Traditionally when we think about performance we are thinking about the past. And while we can certainly learn from the past, a good manager also considers another dimension of their employees - potential. While we might keep a performance rating as the final yardstick, capturing potential also opens up the conversation and can highlight obstacles an employee may be facing that prevent them from performing to the fullest.

8. Look to the experts

Google is often considering the poster child of performance management, but that doesn’t mean you have to follow their system step-by-step. Consider what competitors or similar sized businesses are doing. Are the industry standard measures employees can strive for? Or company level KPI’s that show where you are headed as an organization? Benchmarking can also help us gain perspective on what’s working and what is not.

Software isn’t enough

Now at this point, you might start to wonder on what kind of site you’ve found yourself. Peoplegoal is an online employee experience platform and we truly believe that we can help you make your next performance review cycle low stress. You can request a consultation here. But at the end of the day you’ll only get out of your software what you put in just like you can’t expect a broken process to deliver your ideal results.

There’s no shortcut to running an effective performance management process, but it is definitely worth the effort to design something that works for you and your direct reports. What’s the biggest pain point you have in your current process or while designing your process? We’d be happy to lend an ear whatever it may be; contact@peoplegoal.com