Executive Podcast #326: Mastering the Annual Performance Review

Perry Holley:
Welcome to the Maxwell Leadership Executive Podcast, where our goal is to help you increase your reputation as a leader, increase your ability to influence others, and increase your ability to fully engage your team to deliver remarkable results. Hi, I’m Perry Holley a Maxwell leadership facilitator and coach.

Chris Goede:
And I’m Chris Goede, executive vice president with Maxwell Leadership. Welcome and thank you for joining. As we dive in, I just want to say thank you to all of our. Our listeners and especially those that are engaged and active. And we get comments, we get feedback. What I love about it is that even sometimes we’re on the road and people will hear your voice. Hear my voice, Maxwell fans, and just say thank you. I want to encourage you to keep sharing this not only with your peers and your friends, but with your team.

Chris Goede:
Use this as a tool for you to begin developing other people. A lot of times they say we just don’t have time to. To develop people. Well, you have team meetings, right? Like, let’s take this. Let’s share it each week. And so we’re grateful for you.

Perry Holley:
So say that we don’t look as tall as. That’s right.

Chris Goede:
That’s right. While we’re sitting down here. But as we get started, you know, just as usual, Perry’s developed a learner’s guide. And if you want to access that, if you want to leave a question or comment, maybe your teams. I just talked about is struggling with something and you said, hey, will you talk about this? Perry would love to go write a lesson for you on that. And then we would. We will kind of banter. He probably already has one.

Chris Goede:
I want to encourage you to go to maxwellleadership.com/podcast. Click on this podcast and then you can fill out the form right there. Download the learner’s guide and you’ll be good to go. Well, this is kind of starting off the year 2025, and we’re going to talk about a topic or a phrase that not a lot of leaders like to do, don’t like to talk about, and as team members, we don’t like to receive sometimes. We’re going to talk about mastering the annual performance review now as we record this. Right. Perry still hasn’t received his review yet, and I think this is why he brought this title to me.

Perry Holley:
You know, these things. We’re going to talk about this. How do I coach.

Chris Goede:
How do I coach Chris to get.

Perry Holley:
Before I get my review to do that?

Chris Goede:
Yeah.

Perry Holley:
Yes. This was I flash. I got bad memories of this. I was first a sales guy for a while. Then got promoted to be a first line manager and had my first team. I had 11 on the team and I got into, I thought leading. I wasn’t. I learned so much about what I didn’t know.

Perry Holley:
But I spent that first year, you know, I probably came in in like in April or some of the year just naturally encouraging people, tell them how great they’re doing. Giving no feedback, no guidance, no, not. And making everybody believe that they were my number one top performer. Cause that feeds my level two personality. I just am good at that. But then I got into January and with IBM at the time and they had a three point rating system. You were a one, you walk on water, you were amazing. You’re a two, you’re a above average contributor and a three, you need some improvement.

Perry Holley:
Pretty basic. And so I just told my boss, no problem, everybody’s A1. And he said, nope, they can’t be ones. Here’s your skew. You’re going to have one, maybe, maybe two ones. You can, you can have, you know, four or five, maybe six twos. Everybody else with three. I go, no, I don’t think you understand.

Perry Holley:
He said, I don’t think you understand. It’s all tied to bonus money. It’s all tied to your budget. It’s all tied and it’s already decided. And I was mortified and I realized I had no clue what performance development was all about and how to help people with their performance or how to grade performance, how to evaluate performance. I never given one thought to it. And so the annual review came up and I found myself in trouble. I upset everybody.

Perry Holley:
Well, except for the one. Well, I think I gave out two ones. They expected it. The other people all were wondering what happened. And so I went on a mission then to figure out how to let people know how they’re really doing. And I thought maybe we could share best practices. I know you’ve been doing it a while as well and maybe just give our listeners some best practices on that that’s coming up. It’s too late to recover from what you didn’t do this year, but you can get this year started off in a positive way.

Chris Goede:
I love your story and your example because I think that resonates with so many people that are out there listening and a part of leadership and a part of teams. The opposite is true as well. Perry is mentioning it from his bent as a leader, which is at level two. The connection highly relational. There are a lot of leaders and I’ve had this experience in the past that are bent towards the level three and the production and the results and the way that they delivered the reviews would have been exactly opposite of you giving everybody a one.

Perry Holley:
Right.

Chris Goede:
And that had a. A drastic impact on the team, the dynamics, the engagement and the culture. So there’s a way to go about this. You’re going to have to have some learned behaviors around it. What I like about what you said is that that was an annual review and now it’s more of a conversation that we need to be having throughout the year. Mark Cole said to me a long time ago, I’ll never forget this. He said, if you get to your annual review and anything that’s talked about in that review is a surprise really to either one of you. But specifically from the leader to the team member, that’s on you.

Chris Goede:
You’re not leading properly. And then I would also say on the other side. Right. You’re not leading properly if that team member hasn’t been comfortable enough. And we’ll talk about how to. How to make this very effective to be able to communicate to you maybe what they’re dealing with on a continual basis, not just every December or January. As we look at doing this, you may have to do those HR compliance. Understand all that.

Chris Goede:
We’re just saying we’re going to give you some things to think about when you go through this, but also we want you to apply them throughout the entire year with yourself.

Perry Holley:
That’s actually pro tip number one is focus on continuous feedback. Not just one time a year. I would think that that’s not that common anymore, just one time a year. But I do hear it on coaching calls. Got my annual review coming up. What have you been talking about? Well, nothing.

Chris Goede:
Right.

Perry Holley:
I thought so. One thing I learned right away as to your point with what Mark was saying, is that focus create a culture of feedback, of continually letting people know. I would also say that learning to be very direct about things that I could. One of my mistakes early on was I gave continual feedback on your performance. All positive. No, no, that’s called encouragement. That’s not feedback. So feedback’s got a couple different ways.

Perry Holley:
In the constructive piece. The challenge piece is not. Was left out of mine and it set me up for a event in January because I. Everybody thought, yeah, tomorrow’s point. Yeah, everybody knew how they’re doing great.

Chris Goede:
Right.

Perry Holley:
Well, you’re not. While you’re doing well, can you improve? Can you be better? Yeah, everybody can. So let’s focus on that.

Chris Goede:
Love that. So in addition to that continuous feedback, we also want to encourage you Then to set aside some time to actually do a little bit of a structured review. Okay, so this is a little bit different, right? You’re going to continuously give feedback. But what we’d like for you to do is maybe on a monthly basis, once a month, maybe it’s quarterly. Is that then set aside and have a structured time where you actually go back to a document, you actually go to the KPIs. Where are they at? Where are they measured? I know with one of the sales teams that I have the opportunity to lead, right. I talk to them often, weekly, if not daily, with deals and sales and this and that. But we sit down once a quarter, we’re like, okay, here’s what your KPIs are for that quarter that then lead into.

Chris Goede:
And so what we’re saying is not just the continuously, but man, set a little bit of a time where you can implement something on a quarterly basis.

Perry Holley:
And you’re setting up an expectation that my supervisor is going to review my performance with me on a quarterly basis.

Chris Goede:
That’s right.

Perry Holley:
It may not be official. It doesn’t carry any of the weighting of the bonus plan or whatever. Perhaps, but it could. But I think they should be expecting that they’re going to get feedback from you on a regular basis. I like quarterly as well.

Chris Goede:
What I think that does. When you just talked about a lot of our listeners have some type of tie to that for their annual review. The great thing about that is you give that team member time to make sure that if they need to redirect, if they need to give a little bit more, they need to back off, whatever, because that is leading to what that annual review is. And if you don’t have those again, then you’re going to get to the end and then there’s no chance then to redirect anything or being a part of a package. But if you’re having those conversations on a daily basis and then sitting down and strategically looking over the document on a quarterly basis, it leads to that annual review. The annual review becomes the work is already done, but it’s done throughout the year. Versus saying, can you block my calendar for the whole week? Because I’ve got to prepare reviews for my entire team. That’s just not good.

Chris Goede:
And then you don’t even remember what happened in Q1 or Q2 or for me last month, right?

Perry Holley:
So I just had a call this week. A coaching client said that a certain person on the team keeps saying, I want the next job, I want to be promoted, I want the next job, I want to be promoted. And he said, well, because they did these quarterly reviews, they were able to put that on the. That’s part of your development. You want to have the next job. Here are the things you need to do. And so the plan, the performance plan laid out, these are the gates you need to go through if you hope to qualify for that promotion. And he said, if my job is now easier because they didn’t do any of it when we had our next review.

Perry Holley:
They had. They had no progress. So now they’re going to complain about. They need to know you’re not. You didn’t do what you were supposed to do. But I know that because we’ve been talking about it along the way, and.

Chris Goede:
It makes highly relational guys like you and I leading. It makes it easier to do that. Right, because you’re just pointing back to a conversation that we had to document that.

Perry Holley:
Right?

Chris Goede:
Yeah.

Perry Holley:
And you’re. I think tip number three is really this. Use the term KPIs. Are there clear objective criteria being discussed? It cannot be subjective. It didn’t feel like you were doing this. It didn’t feel like you were doing that. I’m not sure. No, no, no.

Perry Holley:
We need to. They always be tied to what are the metrics, what are you trying to accomplish? And it can be a wide range of metrics. Definitely. There’s revenue and expense and profit and things like that. But it can also be projects. It can also be hours. It can also be contracts. I know some things you use.

Perry Holley:
You. You put these metrics and we measure against that. Leads. You can. Lots of things you can do, but they. It can’t be just here and there. It’s gotta be specific.

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Chris Goede:
I wanna go to tip number four. Perry and I have talked a lot about this. It seems over the last really 12 to 18 months more than we ever have before about this psychological safety environment of your team member. And what we’re really saying is how do you get to a place where you’re leading and your team feels seen, valued and heard? That’s what we’re talking about when we talk about that. So tip number four for us is make it a two way conversation. And I think when you do that and you’re open to it, you’re not just doing it to check the box, you’re being authentic about it. I think you’ll get to a place where your team members leave those meetings feeling seen, valued and heard. The importance though of the, of the two way communication in addition to that is I love this because it allows me to ask questions, to begin to see how they’re thinking.

Chris Goede:
Right. Like where are they at? Why do they feel like they’re exceeding here? Do they understand that? Is there an awareness issue? What does that look like and then or where are they missing it? And I can help them. The other thing is, is that it really helps, as I was just saying a minute ago, helps me maybe realign them with something that maybe I wasn’t doing a good job at communicating and I missed it and it would have been my fault down the road if they would had a negative marker or maybe they just wasn’t hearing it. So really want to encourage the opportunity for you guys to make it a two way conversation and actually act like you enjoy the conversation. Right. Like get involved in it. When you do this and you do it through this process which is uncomfortable for everybody, it strengthens trust for you as a leader and trust in the team member and how they’re responding. That will not only help that session but it’s going to carry over in the field of what they’re getting done.

Chris Goede:
Yeah.

Perry Holley:
And I think about I just hearing talk thing and why am I doing the performance? Am I just tick, tick, is it a tick the box exercise? No. Go back to the three questions everybody wants to have answered by you. Are you showing that you’re trying to help me? Are you showing that you care about me? Are you showing that I can trust you? Are you actually trying to add value to me and make me me a better contributor, a more valuable team member? That does make me psychologically safe. Another tip, and I think number five is I noticed a lot of organizations that I’m working with are you don’t just report to one person kind of a matrix. You might be working on a project over here or something over there. And so one thing I started doing was doing my homework, which was get multiple inputs. Before I prepare to have a review with you, I want to know, have I talked to your peers? You have subordinates. Have I talked to other leaders that might be your matrix, your manager in the matrix, but you don’t report to them, you report to me.

Perry Holley:
So I’m going to do the review. But have I gathered input from you, from other supervisors, from other people in the organization? Do I know what your effect is on others? Do I know how you’re viewed by the other? Do I know where you’re providing value? I only know what I see. Very dangerous because I don’t even see you. We have our one on one, but then I go over here and work. Yeah, I’ve done my homework, I’ve checked you out.

Chris Goede:
That’s good. What I love about that is from both a positive and a negative standpoint, I actually have a team member that is about 90 days in with us and, and I have a certain perspective of certain things. And there are a couple of things that I just couldn’t necessarily figure out exactly what it was. And it could be a personality thing, could be a professional thing, all kinds of things. And so what I did was I went to three different leaders that have interacted with this and said, hey, tell me what I need to know to be able to share because this individual is a keeper in our DNA and I want to add value. Right. So I love that you put that in there because again, takes a little bit of work. But it opened my mind to say, oh, that maybe that’s just a personal thing right there.

Chris Goede:
Or okay, now. So now it’s collective. Let me make sure I kind of coach that individual through that. So 100%. I would encourage you to make sure that you’re getting multiple perspectives. So that leads right into number six, which again, this is going to take a little bit of time for you guys, but we want you to prepare thoroughly. Right. Like this is a big deal to them, it needs to be a big deal to you and come prepared with others perspectives as Perry was just talking about with data.

Chris Goede:
The biggest thing I want to share on this one is to come prepared also with examples that back up what you’re talking about. Yeah, how many times have you been in review? And they’re like, hey, period, man, you just, you just messed up right there. Well, tell me how I messed up.

Perry Holley:
Tell me more.

Chris Goede:
I don’t know, it was just you were bad. Felt like, it just felt like I just felt uncomfortable didn’t you feel it? No, I didn’t feel it.

Perry Holley:
Right.

Chris Goede:
Like, so I, I wrote down two different things. I said share examples of that where they were influential and give them an opportunity to grow their influence inside. Inside the organization. Could be cross functionally. It could be in your team. Hey, man, your influence was on point right here. And I could see the team buying into it. I like to use that word.

Chris Goede:
And then there’s some growth opportunities. Give them examples, him or her, wherever you go. Hey, right here, the other day I saw this. I think that it would be received differently if you did it this way. Right? So you’re giving them influential moments and then you’re giving them growth opportunities when you bring examples. This is, this is me personally. I give that leader a lot of credibility right away because they’re bringing the real life story to me. Right.

Chris Goede:
You know, we were talking, we love to talk about football, right? It’s like, here’s the game film, right? Look, look, you jumped off sides, right? Like, there it is, you and the ref throwing the flag right there. Yeah, right. And versus me saying, hey, man, I know you had a penalty the other day, whatever, you know, so you’re able to bring examples to the table. And it just brings credibility as a leader that your team member goes, they’re watching like they’re paying attention. And then, oh, now I completely understand because I did this.

Perry Holley:
What’s your point of view on this? I’ve had a couple of organizations that required that you have the employee, the teammate, write their own review and give it to you before you do the review. Do you have a point of view on that?

Chris Goede:
So we’ve done that here at Maxwell Leadership a couple times. We’ve done it from, you know, everything from a rating scale to you’re talking about 1, 2 or 3, and they give the number first. I prefer to have a conversation about that during the time I’m going to come with my thoughts. I expect them to come prepared. I’m not a big, hey, let me put a 1, 2, 3 on you. And I understand why some organizations do it, but when I did it, I would never look at their data before I did mine.

Perry Holley:
Okay, good.

Chris Goede:
Because I wanted to sit down and go, where’s the gap? And then I let the gap drive our conversations. Whether it was, I’m way higher rating them than they are versus the opposite. And those are two gaps you have to address during that. So it may give you a starting point. It may give. So for my personality, I lean towards the connect. Let’s Verbally process it through it. You would do the same thing.

Chris Goede:
That may not be the best for every personality. So some may gravitate towards that. And I think it’s okay. If you’re going to do that, though, I just encourage you not to look at their results before you put down your thoughts and results. And then the coaching moment is look for the gaps and it’s similar to what you do. We’re going to talk about this at the end of the call with our Maxwell leadership assessment. You’re looking for those, the, the deviations that are like, whoa, we have.

Perry Holley:
Right.

Chris Goede:
An awareness issue here one way or another and we’re going to talk about it.

Perry Holley:
Yeah, good, good. I like that. Number seven was just make sure you end whatever review with. With action steps. What they should not leave confused about what, what do I do? What do I do with that? How do I get better, how do I prepare myself for the next evaluation? And so just making sure that it’s clear and about what’s been discussed and that if you have expectations for them to do something, it’s probably best to put that. Make sure it’s clear. Maybe in writing to make sure that everybody’s on the same page. Yeah.

Chris Goede:
All right. And number eight, document consistently. Perry mentioned just a few minutes ago we were talking about this journey that we want you to have throughout the year. It’s not just an annual thing. It’s going to lead to an annual event. If you do this right here, if you document consistently and you have a consistent process and it’s not on one sheet of paper the first quarter, it’s on a sticky note. Maybe I’m using my life as an example on my desk and then remarkable on the third quarter, but it’s consistent. And then you get to the end of the year, that’s your conversation to your point.

Chris Goede:
It’s not like, hey, I didn’t really know. Well, we talked about it Q1 and Q2. I think the other thing when you document it is that it does ensure accuracy. It goes back to the game film and some may work in a little bit more of a. An environment where you, you got to. For compliance and for HR issues. And so it’s just always good to, to document and have that and include the specifics in there. Use the examples that we’re talking.

Chris Goede:
Document the examples. When you do that, just make sure as you document this process, when someone’s reading this document, they’re not in the conversation with you and the team member. So be careful of just the, you know, they say don’t ever read tone facial expressions into email communication. We all do it.

Perry Holley:
Right, Right.

Chris Goede:
But how do you get to a point where you, you’re able to be constructive? It’s like we talk about Karen Kander. Just do it in a way knowing that somebody’s going to read that down the road someday. And you want both sides to be represented extremely well.

Perry Holley:
That’s really good. Well, I know the performance review, maybe a corporate policy and maybe an exercise that has to be documented and recorded, but it doesn’t have to lose the meaning of why am I really doing this? I want to help you. I care about you. You can trust me. I’m here to help develop you and I want to see you grow. And I think when you have that message in there, the message to them starts to sound a lot more like the caring leader that I want to be working for.

Chris Goede:
Yeah, that’s good. Well, as we wrap up today, I just going to take our conversation and the eight tips that Perry brought to us. And I just wrote down what, what did I hear like was I was going through this. What did, what was my takeaway number one was let’s make sure we’re preparing. Let’s give the team member who spends a lot of time helping us. Let’s, we owe that to them and not just on an annual basis. And make sure that you understand the context behind the, the data that you’re gathering.

Perry Holley:
Right.

Chris Goede:
Don’t make assumptions. I love your idea. Hey, let’s go talk to a couple different people. Secondly is focus on this as their development, not as their review.

Perry Holley:
Right?

Chris Goede:
Yeah. Because as we’re developing, we always say, man, it’d be awesome if at every level inside the organization we had a succession plan. Which means the only way to do that is to develop every single person throughout the organization. So when you go through this, you’re going to be able to see the growth areas. You’re going to be able to help create a plan. Then the other one is, hey, let’s, let’s set clear expectations. So prepare thoroughly, focus on development, set clear expectations. Then finally, as Perry was just saying, let’s follow up, let’s document, let’s make sure we’re all on the same page.

Chris Goede:
Now before I throw it back to you to close, one of the tools that a lot of organizations, a lot of leaders use, we’ve used it. Here is our Maxwell leadership assessment. And it’s a great tool to where you can actually assess the leader or the individual on how they’re leading, how they’re perceived by their boss, their peers, those that they lead, and then outside vendors. What I want to encourage you to do is go to maxwellleadership.com five levels. You can spell out the number five. You can use the number five. There’s a form there and I want you to fill that out. This is a tool that you think would be good for you or your team to use.

Chris Goede:
It is when we were talking earlier about, hey, how do you feel about using numbers? Right when they come to you, it gives you a launching pad of a conversation and this could be something that you did on an annual basis that we’ll be able to show you the growth from one year over to the other or the decline. And you can be having those conversations. So it’s just a great tool for you to jump off and use during your performance reviews.

Perry Holley:
Fantastic. So that’[email protected] 5 levels. However you want to spell that.

Chris Goede:
That’s right.

Perry Holley:
Yeah. I love that. Thinking ahead and you can get that assessment. You can also go to maxwellleadership.compodcast to learn more about our offerings. See the family of POD opportunities that we have for you. Also, you can leave us a comment or a question. We love hearing from you and we’re very grateful you’d spend this time with us today. That’s all from the Maxwell Leadership Executive Podcast.

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