Blu Volcanic Blog Header

How to Conduct an Annual Performance Review

Back to Blogs
Blog Img

How to Conduct an Annual Performance Review

January, the month many people dread: annual performance reviews.
Why are they so often feared? Isn’t this actually the right moment to pause, reflect, address certain points in a constructive way, and take stock of everything that has been achieved over the past year?

In reality, it is one of the few moments in the year when managers and employees can step back together. The annual performance review is often seen as a formal checkpoint. More than an evaluation, it is a space for dialogue, recognition, and alignment.

When handled thoughtfully, it reinforces trust, engagement, and long-term performance.

Preparing the Review: Setting the Right Foundation

A meaningful review starts long before the meeting itself. Preparation ensures the discussion is grounded in facts rather than impressions and helps the process feel fair and structured.

Before the meeting, managers should:

  • Review objectives, results, and feedback collected throughout the year.

  • Prepare concrete examples, both positive and constructive.

  • Clarify the purpose and structure of the meeting and share it in advance.

This level of preparation signals respect and helps reduce anxiety on both sides.

Creating a Climate of Trust

The conditions in which the review takes place matter as much as the content. A calm, uninterrupted environment encourages openness, while time pressure or distractions quickly undermine the quality of the exchange.

Good practices include:

  • Choosing a quiet setting and allowing sufficient time.

  • Starting the conversation with recognition and achievements.

  • Adopting an open, curious tone rather than a defensive or judgmental one.

A trustful environment makes it easier to address both successes and difficulties honestly.

Our latest positions​

Making It a Two-Way Conversation

An effective annual review should never feel like a one-sided assessment. The employee’s perspective is essential to understanding performance in context.

To encourage reflection and dialogue, managers can ask:

  • How do you feel about your performance this year?

  • What are you most proud of?

  • What challenges have you faced?

  • What would you like to do more of next year?

Listening carefully to these answers often reveals motivations, frustrations, or ambitions that numbers alone cannot capture.

Focusing on Development, Not Just Evaluation

While performance indicators and results are important, a review that looks only backward misses its strategic value. Employees are more engaged when they understand how they can grow and where they are heading.

The conversation should therefore also explore:

  • Skills to strengthen or develop.

  • Training or learning opportunities.

  • Future projects, responsibilities, or career paths.

Useful questions include:

  • What support or resources would help you progress?

  • Are there areas or projects you would like to explore in the coming year?

This forward-looking approach transforms the review into a real lever for motivation.

​​

Closing the Review with Clarity

The end of the meeting is a critical moment. Without clear conclusions, even a good discussion can leave room for confusion or frustration.

To close effectively:

  • Summarize key points together to ensure shared understanding.

  • Agree on three to five clear, measurable objectives for the next period.

  • End on a constructive, forward-looking note.

Clarity provides structure and sets realistic expectations for both manager and employee.

Common Pitfalls to Avoid

Certain mistakes can quickly undermine the impact of a performance review. Managers should be particularly careful to avoid:

  • Rushing through the discussion or treating it as a formality.

  • Talking most of the time instead of encouraging dialogue.

  • Focusing exclusively on weaknesses, which can create defensiveness.

  • Avoiding difficult feedback, leaving issues unresolved.

  • Comparing employees rather than focusing on individual progress.

  • Introducing salary discussions unexpectedly, which often increases tension.

Anticipating these pitfalls helps maintain trust and credibility.

Our latest positions​

Cultural Sensitivities in Europe

Performance reviews do not look the same across Europe. In some countries, such as France or Germany, reviews tend to be structured, formal, and supported by written documentation. In others, like Spain or Portugal, the relational dimension and tone are particularly important. In the UK, a coaching approach that encourages self-assessment is often preferred.

Being aware of these differences allows managers to adapt their style while remaining consistent in expectations and standards.

A Necessary Nuance: Adapting with Both Care and Clarity

Finally, it is important to remember that no two employees are the same. Personalities, cultural backgrounds, levels of experience, and confidence all influence how feedback is received. Effective managers adapt their approach accordingly.

Adaptation, however, does not mean lowering standards or avoiding difficult conversations. The challenge lies in combining benevolence with firmness: showing empathy and respect while remaining clear, honest, and demanding about expectations.

A well-conducted annual review is not about being indulgent or rigid. It is about being fair, attentive, and consistent — and using dialogue as a tool to support both individual growth and collective performance.