Year End Performance Reviews

Assuming your company has a calendar fiscal year, right about now you will either be giving or receiving a performance review, or both. Some advice on the year-end appraisals would therefore seem to be timely. The first point to make is that the performance aspect should come as no surprise to the recipient. The results should be transparent throughout the year and the feedback on them continuous. The year-end performance review is not about performance, it is about 2 things, the future and the bonus.

The bonus should not come as too much of a surprise either. In the best bonus systems the majority of the payout is based on a combination of the individual’s and the business’ performance  – see point above. Only a small part should be discretionary based on an objective, but more likely subjective, view of the person being reviewed. This is normally determined by assessing how well they have done versus their peer group and to what extent they have delivered above and beyond the call of duty. Systems that allow someone to get paid more than 100% of their bonus for exceptional service throughout the year are to be recommended.

The most interesting part is the bit where both boss and employee kick back and talk about the future. What has been learnt this year, where have the improvements come? What are the person’s aspirations for the future, are they realistic, what needs to be developed to achieve this? Everyone has their own style but I believe you should always encourage people to dream big and then be supportive but realistic about what stands in the way of those dreams.

People normally get the bonus bit out of the way first and, of course, if this has not gone well this can get in the way of a constructive discussion about the future. What do you do if you have not been given the bonus you think you deserve and you know the business is capable of paying you (no point arguing the toss about your bonus in a business that is going broke, ask the bankers this year)? My advice is to throw it back at the boss (not literally). Imagine you thought you deserved to get 100% bonus or more and you only get 75%. Try this script:-

“Thank you for the information about my bonus. Before I respond can I ask you a question? Presumably when deciding to give me this number you had a point of view on how I was going to react. Do you mind if I ask you what that was?”

Boss will now look very edgy and will mumble a lot of stuff and say as little as possible. Press home the point but in a calm matter of fact way.

“ I am not trying to be difficult, I am just curious. Did you think I would be pleased and feel very motivated about the future, did you think I would be satisfied and want to know about how I could do better next year, did you expect me to be disappointed and just take it on the chin, or did you think something else? You obviously could have given me more and of course you might have given me less, I was just interested to know what effect you thought this bonus would have on me?”

Boss will now either admit they did not give it that much thought or will foolishly choose one of the options you gave them. If it is the latter, you’ve got them whichever option they choose. If they say they thought you’d be pleased you can ask why and put them even more on the defensive. If they say they thought you’d be OK with it, you can say you don’t do ‘OK’ and are surprised they do. If they say they knew you’d be upset you can ask if they were concerned that you might look to leave. At 75% bonus they obviously do not want that (if they did it would have been even lower) and will now really be on the defensive.

At a certain point suggest – again very calmly and in a very matter of fact way, this really unnerves people – that perhaps it would be a good idea to take some time on both sides before discussing further.

This approach stands some chance of getting the bonus changed but a bigger chance that they will be more generous in the future. At the very least it is very satisfying to see your boss squirm. One member of our team has used this – in a previous life I hasten to add – and it worked like a charm. Times were better then, however, so use with caution.

One Response

  1. Great post this will really help me.

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