The review stage of the performance management cycle

You’ve set goals and objectives, kept an eye on progress and provided development support—now it’s time for the review stage of the performance management cycle. This is where you assess progress, and have meaningful conversations about what’s working, what isn’t and what’s next.

In other words, the review stage is a performance review for employees—which is also known as an employee performance appraisal. Regardless of the term you choose to use, if handled well, you’ll set the foundation for motivation and continuous development and stronger engagement. Handled wrong, well let’s just say nobody enjoys a demotivating performance review.

But how can you make the review stage valuable rather than just another box-ticking exercise? Let’s get into how to effectively evaluate performance.

What is the review stage?

The review stage is where you or a manager, and the employee reflect on performance over a set period of time—typically through a formal employee performance review. Unlike the regular feedback given throughout the cycle, this stage provides a structured opportunity to:

• Assess progress towards goals set during the plan stage of the cycle

• Identify strengths and achievements to recognise what is going well

• Pinpoint areas for improvement and create a plan for growth

• Discuss career development and future opportunities

Just remember that this stage isn’t about catching employees out, it’s about collaboration, clarity and setting them up for success.

Why the review stage matters?

A well-executed review stage helps to boost engagement, increase clarity, encourages development and prep for the rewards. How you ask? Here’s a few reasons:

• Employees who feel heard and valued are far more likely to stay motivated

• It ensures alignment between an individual’s work and business goals

• Honest, constructive feedback helps employees improve and grow

• It lays the groundwork for fair and meaningful recognition in the next stage

How to hold an effective performance review

To make the most of the review stage, you should focus on creating a process that’s fair, transparent, and constructive.

Here’s how:

Prepare thoroughly

Both yourself, managers and employees should come to the review with a clear picture of what’s been achieved. This means:

• Gathering data from performance metrics, self-assessments, peer feedback and previous check-ins

• Reviewing goals set earlier in the cycle—Were they realistic? Were they met?

• Noting key successes and challenges to discuss in detail

Preparation makes sure that the conversation is informed, balanced and productive.

Encourage honest and two-way feedback

A performance review isn’t just about you or a manager delivering feedback, it should be an open dialogue. Your employees should feel comfortable sharing their own experiences, challenges and career aspirations.

To encourage this, you can:

• Ask open-ended questions

• Be specific with feedback, using real examples

• Listen actively and acknowledge employee perspectives

The goal is to create a space where employees feel heard and valued, not just evaluated.

Focus on growth, not just past performance

While looking back at achievements and setbacks is important, the review should also set the stage for future development.

This includes:

• Identifying skills to build and opportunities for learning

• Setting new objectives that align with both employee growth and business goals

• Discussing career progression, including potential promotions or new responsibilities

A great review doesn’t just highlight what’s been done, it gives employees a roadmap for what’s next. By providing clear next steps, you ensure employees leave the review with a sense of direction and motivation.

Be fair and objective

Performance reviews can sometimes feel subjective, but fairness is key to maintain trusts. To ensure your evaluations are balanced, you can:

• Use clear criteria tied to job roles and objectives

• Consider multiple sources of feedback, including peer and self-reviews

• Be mindful of unconscious bias and focus on performance over personality

A fair and transparent process helps employees feel that their efforts are recognised and rewarded appropriately.

Done right, performance reviews aren’t just a formality, they’re a powerful tool for driving both individual and business success. And remember that a performance review isn’t just a once-a-year event. Keep feedback flowing throughout the cycle to ensure continuous development and engagement.

What comes after reviewing performance?

The review stage is all about reflection and planning. By taking performance reviews seriously and making them meaningful, you set the foundation for a workplace where employees feel valued, supported, and eager to grow.

So, what happens next? It’s time for the final step in the cycle—rewards!

Whether it’s a pay rise, a promotion, a bonus, or simply recognition, the reward stage reinforces motivation and engagement. It’s the stage where your employees see the tangible outcomes of their hard work.