15 Performance Reviews Best Practices + Template

Performance reviews are often dreaded by employees and managers alike—and not without reason. 

When poorly executed, they can feel like a box-ticking exercise, rooted in vague feedback, misaligned goals, and unproductive tension, or worse a surprise attack on everything an employee has done over the last 6-12 months.

In fact, a study by Gallup found that only 14% of employees strongly agree that performance reviews inspire them to improve.

Similarly, research by Betterworks found that 64% of workers find them to be a partial or complete waste of time.

Yikes.

So why persist?

Because, when done well, performance reviews can be powerful.

They help clarify expectations, align individual goals with company strategy, celebrate achievements, and open up meaningful conversations about growth and development.

The key lies in transforming the review process from a half-hearted retrospective critique into a forward-looking dialogue based on concrete evidence.

With the right structure and mindset, performance reviews can shift from a dreaded ritual into one of the most valuable tools in the performance toolkit.

Here I draw from my own experience, and some fellow performance management experts, to bring you some performance reviews best practices to ensure yours are as effective and engaging as possible.

15 Performance Reviews Best Practices

The actual performance review is the tip of the proverbial iceberg and, like most things, what makes the actual review a success is the groundwork.

1. Figure out what you want to get out of it

The first step is evaluating the purpose of the reviews and getting crystal clear about what you want to achieve from them.

Here are a few examples of things to ask yourself and what you may have to consider for each:

Are they just to give feedback and guidance?

If this is what you want to do, think about what feedback will be really important for people to hear at these reviews as milestones once every 6 or 12 months. 

Regular feedback should not be kept for these sessions and should be in the regular 1:1s you have with your team members.

The worst thing you can do is tell your employee “Hey, the thing you did 3 months ago was not good, but I waited until your performance review to tell you and chastise you for it, making you get a lower score.”

Will they be used to give bonuses or raises and provide a rating to back it up? 

If that is the case, know that employees may be extra apprehensive of their score and will want to understand in more detail why the rating is what it is.

It is after all impacting their pay/bonus. Do you want to have this conversation alongside the performance review or separately after the review?

Will they provide ratings to know who to let go or not?

If this is the case then know that there are two major risks you are running 1) a morale dip as people are prepared for basically what amounts to a round of firings and 2) potential round of pre-emptive resignations.

Additionally, similar to providing regular feedback, think about why this person was not let go before when it was evident they were not performing.

Do you want to reflect on the period only or also strengthen performance?

If you want to strengthen performance, you should be running the review based on the previous feedback and performance of the employee over the period of review, which means that you should have both closely observed and noted their performance and have regularly given feedback.

Based on these two components, you should be preparing your review to be a bit of a summary of previous performance and more focused on the next period and how the employee can strive to do even better.

For maximum impact, you should make sure that the suggestions for improvement are not just “Get more sales”, but instead focus on what you have recognised are the employees strengths and weaknesses. 

A good motivational piece of feedback would look something like:

“You are very good at the initial pain-points conversation, empathising with the clients which is very strong and clients often cite their delight at their interactions with you. Your follow through is not as strong so let’s create a bit of a framework where you can build up the muscle for you to follow up on the conversations you had to convert the sale.”

2. Make them part of your people strategy

The performance review process should be part of the mechanism to implement a people strategy, not just because "everyone does it."

To make it part of your whole people strategy, you have to create the review process with the rest of the strategy in mind and vice-versa.

For example, when you’re creating a performance review, how does that impact hiring, onboarding, pay and reward, and succession planning?

In turn, how do these components impact the performance review—from the grades or rating scale that you use to how often you have them or how long they take?

For example, if you’re going to have a performance review every 6 months. Here are some things to think about:

• How would that impact the probation period (if you have it)? 
• Is everyone going to do it at the same time or depending on when they start? 
• What is the outcome of the review—promotions, raises, bonuses? Every 6 months or every 12 months, making one of the reviews more of a check-in?
• If promotions are every 6 months, how does that impact your hiring and succession planning, do you have to do it more often than once a year? Likely so.

If you don’t integrate your performance review process with everything else, it’s going to catch up with you and you will have to figure it out in haste on the go, which can make your overall strategy feel disconnected and like a box-tick exercise.

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3. Get clear on performance expectations

“Performance should be measured in three areas: how well an employee embraces and demonstrates the company’s core values, the extent to which the employee contributes to the achievement of the organization’s strategic goals, and whether or not the employee has met the personal development goals they have set for themselves.”—Eveline Brownstein, HR Director, Stern Strategy Group

Ideally, performance expectations should be clarified at the hiring process stage with further refinement upon onboarding or whenever an employee is promoted. 

Talking about performance expectations at the hiring stage may seem really early, but it is the main way to make sure that any sourcing, interviewing and assessments are relevant and correct.

Performance expectations can be categorised as follows:

• Knowledge, skills, and abilities (KSAs)—these are going to be what the employee puts into their work to do their best. Often employees will be strong on one or another skill, come with some knowledge but need to gain more in-role etc. 
• Output—ultimately the KSAs should lead to the output. Whether that is a product, a sale or a hire depends on the role and what the company needs right now. 
• Values—Some companies may also choose to include behaviours as part of the performance expectations, but those have to be managed carefully. You don’t want to be scoring employees based on their personalities and instead on the “how” of their output e.g. if they did get a sale, but went against the company’s team-based value, i.e. they stiffed a colleague on getting their sale, that would be an issue that can be discussed.

Once you agree on what is important, time to train up the managers. 

Sit down with the manager and go over all of them and ensure that the position/employee is in fact performing these, and only these, KSAs and outputs. 

If not, the job description needs to be edited or a new title is needed to more accurately evaluate the employee. 

The best way to start is to lay out the performance expectations and document it. Then, after a set time of 3-12 months, evaluate the performance against the expectations. Wash, rinse, repeat and update when needed e.g. role change or promotion.

Pro tip: Create a true ratings system to track the performance of certain fields and positions to gauge against new hires, future appraisals, etc.

4. Give managers some skin in the game

Sometimes managers just see performance reviews as another admin burden, so find a way to make the process work for them as well.

What value does this add? How does this change the fit, form, or function of the product? If the answer is that it doesn't, you won't be able to motivate the managers because you need this, not them (from their perspective).

If your performance review process drives continuous improvement like training, you can explain it as the first step to giving the managers more tools in their toolkit (trained employees), and build engagement and involvement that way. 

You should also have built relationships strong enough with the managers (or at least one or two of them) to ask them flat out and get an honest answer. 

Additionally, you should leave space for their feedback too! As much effort as you may have put into creating a great performance review process, you never know where ideas of improvements may come from.

Some teams might need something a bit different than what you envisioned. 

Listen and take action (if no action, they won't bother to engage with you again). If you don't have these relationships, no worries! There’s no time like the present.

5. Develop a clear rating scale

This can be quite a controversial topic, however something is needed to mark the performance and give a shorthand for further reference.

There are companies that go the numerical route and others that go more in the qualitative statements route. Some combine with a behavioral scale.

There is no silver bullet, nor is there a heuristic e.g. numerical values are for large companies. You have to decide what works best for you.

Here are a few questions to answer to see what might work best for you. 

• Do you want to score just output/impact or other bits?
  • For example you can give employees a score on output, a score on KSAs (together or separate) and then average it out for an overall score.
• If you introduce a numerical scale of more than 5, can you confidently explain the difference between two close scores in every case (i.e. not just using a specific example but a generic one as well)?

Expert recommended:

• Keep it simple!
  • You can literally have 3 scores: Below expectations, Meets expectations, Exceed expectations. That may be enough. 
• Optional levels like Significantly below expectations and Outstanding can be added to catch the extreme cases, one of which should result in termination really. 
• Make sure that the expectations are kept crystal clear throughout the review period so that there are no surprises.

6. Recognize alternative achievements

We’ve spoken a lot about output, impact, KSAs etc. but if you want to truly build a team, there are things that employees may do that do not fall within the above strict definitions. 

Make sure you call out those, as some of these actions, may be a partially strong glue that holds your team together.

It’s not about encouraging employees, for example, to lag on their work or to overwork themselves to be doing their job, but also organise team nights out and cross-team training etc. 

You don’t want just one person carrying that for the team and burning the candle at both ends, but you do want to acknowledge your gratitude for their “extra-curricular” work. As Elizabeth Harrin, Senior Project Manager at Nuffield Health, points out:

“Use the review to call out ‘hidden’ work. As a manager of project managers, it’s easy to identify the big tasks and projects my colleagues have, and it’s easy to center a review around those. 

But there are a lot of other tasks that happen, and we can use performance review conversations to let people know that the work has been seen.

For example, one of my colleagues is mentoring an analyst through a year-long training program.

My team members have supported process refreshes, re-written team templates and checklists, and done other activities that aren’t officially on their list of objectives for the year. 

Recognizing this effort shows that you’ve noticed the emotional labor or morale-boosting activity that keeps the team ticking over.

Remind team members to record their achievements throughout the year. 

One of my direct reports got some nice feedback about her performance and I reminded her to add it to her ‘evidence list’ for her year end review. 

She hadn’t started a list for the year yet. It’s something I do for myself every year, probably because my memory isn’t as good as it used to be and I won’t recall what good things I did in the first few months of the year towards my own objectives when we get to Quarter 4.

If you have a template you can share, send it out at the beginning of the performance year, or just remind your team members to make a start gathering screenshots of nice emails they received or logging their achievements.”

7. Make feedback relevant, specific, actionable and growth-focused

This requires for the managers to be very active and observant of their teams. Note this does not mean micro-managing and monitoring, but only to be very aware of how their team is doing.

Nothing can disengage people from the process more than making the feedback generic and vague.

If I was to wager a guess, I’d say that most of the disengagement around the process comes from the low quality of feedback. Let’s go over each of the above in detail:

• Relevant—Talk about the things your employee has actually done. How did they do it - show them that you notice things and you care. Do not talk in generics or just top-line things.
• Specific—Vague feedback on “you need to do better” or “work faster” kills momentum and trust like little else. Where were they slow? What was your expectation and where did you communicate it? How exactly can they be better? 
• Actionable—this should make sure your feedback is what is needed when it’s needed vs. feedback on their personality or something that they cannot do. Again the example about “getting better” should be more around what exactly they need to do and ideas on how to do it better. 

Growth-focused—this means you should keep your feedback to talking about a productive future and what can be learned, not to scold them on what they missed out in the review period.

Pro Tip

“Constructive reviews focus on specifics: what was done well, where there’s room for growth and how to get there. Incorporating real-life examples grounds your feedback in reality, making it more relatable and easier to act on. For instance, rather than saying “Improve communication,” a manager could say, ‘In project updates, adding a brief summary at the top would help stakeholders quickly grasp key points.’”—Laura Maffucci VP, Head of Human Resources at G-P

8. Make the purpose and outcomes clear

Make sure both employees and managers know very well what the purpose, impact and outcomes of the performance review are. 

If an employee gets a low score, what can they expect, is it a PIP or a direct dismissal? If they get a high score, will they receive a promotion or pay rise? 

Make sure you highlight all of these things to both managers and employees and make that information easily discoverable for people to have access to. 

Performance reviews can already be an anxiety-inducing process, don’t let the lack of knowledge on the process be one more factor in the anxiety.

9. Create a wider culture of ongoing feedback

Overall, what works is when managers give regular feedback and coaching. Reviews are just a chance to get to the balcony and reflect on past conversations and plan for the future. They have very little impact on their own without creating a culture of ongoing feedback.

Rhea Shyamkant, Head of People at InDebted, puts it very well:

“The magic doesn’t happen in one annual meeting, it emerges through ongoing dialogue that turns feedback into forward progress:

• Begin with genuine curiosity about each person’s aspirations and challenges
• Co-create meaningful goals that connect individual growth to wider purpose
• Have regular, casual check-ins where barriers are removed and wins are celebrated
• Conduct quarterly conversations that reflect on progress and reset direction
• Build relationships where feedback flows naturally in both directions

These conversations create psychological safety where team members feel comfortable sharing both struggles and ambitions.

I’ve seen previously disengaged team members come alive when they realise performance discussions aren’t about judgment but about partnership in their growth.”

10. Be growth and development focused

We talked a bit about feedback being growth-focused above, but I wanted to give it its own section because, for me at least, the biggest opportunity of any performance review is to help your team grow and develop.

Performance reviews are not quite useless if the manager just tuts and wags their finger in an employee's face with a highlight reel of their failures in the background. 

If employees see a path ahead, and that managers are invested in walking that path with them, they will be bought in a lot more.

If you want to go a step further, leave space to involve them in setting part of that path as well, to give them even more agency over their development.

For example, you may see they have strengths in X,Y and Z, but the simple question of “what do you want to do in the next 2 years?” can open up the path that they want to develop in A and B and they already have some knowledge you didn’t know existed.

After the review, make sure you set goals to really bring to life what you discussed in the review. There are a few different shortcuts to goal-setting. 

• OKR—mostly used for company-wide objectives vs personal goals, but if the subject to the review is a senior leader they can own an OKR which is part of their development goal. 
• PACT—Purposeful, Actionable, Continuous and Trackable. This is great for developing a skill or knowledge as it is continuous
• SMART—Specific, Measurable, Attainable, Relevant and Time-based. Useful for certain objectives - e.g. improve how you do X or get a certain number of sales/ticket points solved. 

This one is a bit more open ended, but whatever you do don’t leave it as “We’ll figure it out over the next X months”. Something will pop up and you won’t come back to this. 

11. Ensure the process is compliant with state or country legal requirements.

More and more companies are taking advantage of a global workforce which should increase the need to keep up with legislation of the different jurisdictions.

“Regardless of whether you have annual reviews or quarterly check-ins, it's important to tailor performance review practices to align with local regulations and cultural expectations. Non-compliance can lead to legal challenges or spark internal conflicts if employees perceive the evaluation process as unfair. 

For example, in France, performance reviews must adhere to strict legal standards, including objective criteria and confidentiality, while in the United States, practices may vary by state, particularly regarding documentation and employee rights.”—Laura Maffucci VP, Head of Human Resources at G-P

If not sure, seek advice from a local HR consultancy.

12. Be culturally sensitive

In a similar vein to the above, if managing international teams, managers may have to navigate cultural nuances and communication styles, as well as local legal and compliance issues.

Marina Farthouat, VP of People at Oyster, suggests creating playbooks and providing specific training:

“Create culture-sensitive conversation playbooks for managers with specific training on balancing performance expectations with humanity—especially across different cultural contexts. 

Develop open-source manager playbooks with detailed guidance for constructive feedback conversations across various cultures.

For instance, in some cultures, direct feedback may be considered essential, while in others, more context-setting and relationship-building might precede feedback conversations. 

In other cultures, praise and encouragement is needed before sharing any constructive feedback. 

These playbooks should include sample language, potential challenges, and approaches tailored to different team members' communication preferences.

This isn’t about stereotyping people’s working preferences based on culture, it’s actually about catering for personalized preferences, whilst acknowledging that some of those preferences may be understood through cultural trends.

There is a big nuance there. The book from Erin Meyer, “The Culture Map” is useful in this context but it’s not enough. It’s important to also go beyond it and help managers use cultural awareness in a very practical way.”

13. Utilize available rools

The right performance management tools can make anything from filling out reviews, calibrating scores, and looking up historical performance much easier, so make sure you utilize them.

A pro tip is to develop the process first and then look for a system that can do what you need it  to do. There are many choices out there, but at minimum the system should feature:

• Option to customize questions
• Score and prose questions
• Historical review of performance
• Peer feedback (anonymised or not)
• Review scheduling. 

More tools are also incorporating AI to help remain compliant and ensure fair reviews:

“Today’s advanced AI-powered HR agents can assist companies with globally distributed teams by surfacing relevant local guidelines, employment laws, and best practices in real time.

These technologies can also provide resources such as manager-facing FAQs or checklists to ensure reviews are conducted fairly and in line with jurisdictional expectations—helping organizations reduce legal risk and build trust across regions.”—Laura Maffucci VP, Head of Human Resources at G-P

Quick note: Make sure you vet and verify any legal advice or summary received from an AI agent, even if trained only on specific company data.

14. Encourage high-quality self-reflection

Getting the employees to participate in their own feedback is just as important. Do not let them become just passive receivers of feedback from their managers, they need to be participants.

This gives them ownership of their own path and development. They should be able to recognise both some development areas, but also pat themselves on the back for their achievements. 

Managers should take a look at the feedback employees write for themselves and make sure that it’s not just pro-forma and there to tick a box.

As Marge Konvicka, HR advisor at G&A Partners, highlights:

“At our organization, before any formal review meeting takes place, we ask employees to complete a self-assessment reflecting on their accomplishments, challenges, and growth areas. Managers also prepare their feedback independently. 

Once both perspectives are submitted, the manager sets aside dedicated time to sit down with their direct report and openly discuss each other’s responses. 

This mutual exchange fosters clarity, trust, and a shared sense of ownership over development goals. It transforms the review from a one-sided evaluation into a collaborative, forward-looking dialogue.”

15. Emphasize the importance of two-way feedback

Everyone has something to learn and sometimes learning can come from below, not just above. 

Giving employees the opportunity to give their managers feedback is a really valuable tool to yet again engage employees in the review process and give them agency. 

They too may have ideas on gaps the manager needs to fill or alternatively may want to shout out their managers for something they did really well. 

This may require you to train the managers on how to receive the feedback from below in case they are not accustomed to it from previous employment. 

Just as managers expect their employees to receive feedback as a gift, so should managers be expected to receive their team members’ feedback as a gift as well. 

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