Everybody hates performance reviews. That’s a given. But there are ways to move them out of the “dreaded chore” category into the file titled “engagement tools.”

Performance reviews are often badly done and serve to de-motivate employees — or worse, give them a weapon to sue the company.
What’s wrong with this process? Here are the three most common mistakes managers make that limit the value of employee assessments:
1. Process vs. progress
Too often, the process of employee reviews becomes more important than the actual result. What do employees want out of their reviews? Aside from a raise, the main thing employees want to know is what career path they’re on — what they have to look forward to in terms of job growth and development.
Too many reviews omit a discussion of what advancement opportunities may be available in the near future, and what the employee needs to do to make it happen.
2. What will tomorrow’s expectations be?
Too often, reviews for well-performing employees congratulate them on what they’ve accomplished and let the story end there. For example:
An employee meets a predetermined goal of boosting production by 10%. Her manager writes in her review: “Your production was lifted by 10% and you’ve met your goal.”
While that’s true, wording it that way makes it sound like she’s reached the end of the line. Instead, the manager should say: “You lifted production by 10%, which is a great accomplishment. You should continue the progress and try to reach 15% — or even higher — next year.”
That congratulates the employee on a job well done, while reinforcing the fact that there’s always room to move forward.
3. Nix the money talk
Intertwining salary issues with performance discussions is truly taboo. Raises should always be the last thing the manager talks about — and in a separate meeting.
If pay comes up before the review is fully completed, it’s more likely employees will start arguing about the assessment instead of taking responsibility for their work. When the review is completed first, employees are more receptive to the manager’s critique.

Help for managers

To help your managers get better at reviews, here are some do’s and don’ts, courtesy of leading employment lawyer Jathan Janove of Ogletree Deakins, who spoke at the Labor & Employment Law Advanced Practices (LEAP) symposium in Las Vegas.

Don’ts

Don’t store up feedback. Don’t use a review as a gunnysack for storing up negative feedback over a period of a whole year and then dump it all on an employee’s head at review time. Feedback, both negative and positive, needs to be given throughout the year.
If you must bring up a new issue, apologize for not bringing it up sooner.
Don’t dispense report cards. People don’t want to go back to the school benches and be graded. If you give them five Bs and a D, all they’ll focus on is the D. Just tell them in plain language how they’re doing.
Don’t say things that could be subject to negative interpretation later. Avoid phrases like “you might try a little harder since you tend to be a little lazy” or “I’m cutting you some slack since you’re approaching retirement.” These only spell t-r-o-u-b-l-e.
Don’t use a review for discipline. Keep progressive discipline out of the performance review process. If you mix ’em up, plaintiffs’ lawyers will say your management process, not the employee, needs improvement.

Do’s

Do keep the end in mind. Focus on where the person is now, what the expectations are and how you can move the person up the line. Focus only on WIGs (wildly important goals) and PIGs (pretty important goals), not petty stuff.
Do give direct feedback. Managers must use the D-I-S formula with their employees — providing Direct, Immediate and Specific coaching throughout the year. That way, the annual review becomes a summary with no surprises.
Do make everyone go through the review process. If you want to build trust among employees around the review process, there can be no opt-outs — everyone gets reviewed, even HR and the C-suite.
Successful CEOs read as many reviews as they can — not to see how their employees are doing, but how their managers are doing.
Do make it a two-way street. Providing feedback should create the opportunity for two-way communication. Managers should be trained to ask the same amount of questions as statements they make.
Sample queries: “This is what I see; now what do you see?” or “How can I help you succeed?”
Do focus on the future. If managers stay focused on what should happen in the future, the employee can feel more fulfilled in his job. Plus, looking forward tends to minimize employee defensiveness about any past mistakes.
People are much less likely to be argumentative this way.
One final thought from Janove: For successful performance reviews, the front windshield is a much more useful tool than the rearview mirror.
This is an update to the original article, which ran on 4/27/13.