Performance Management and Year-End Reviews

Performance Management and Year-End Reviews
  • Opening Intro -

    It is that time of the year: the lights are twinkling, the kids are getting restless and you still have too much shopping to do.


Within this mix, the calendar has added one more pressure for business managers: write up your year-end performance reviews and have these ready before Christmas. If this added pressure is not a recipe for causing agita, then nothing else is.

The following performance management tips can help you complete your employee year-end reviews with precision.


Your company has determined how much it can increase employee compensation for the coming year. For example, that amount may be 3.5 percent and comes in slightly above the inflation rate.

Giving across the board raises of the same percentage to every employee may seem like the sensible way to handle reviews. However, in this economy you want to retain your top workers and that means rewarding some workers with higher than average increases.


Likely, you have a firm grasp of who you top performers are. There may be one or two stand out people, individuals you cannot imagine losing if a better paying opportunity came up. That means offering a year-end raise that is significantly above the company median, perhaps 10 percent or more.

When working with a set figure, you will need to adjust the compensation levels for everyone else. This means that a handful of workers may qualify for the highest raises while everyone else gets a raise in the two to three percent range.


Determining the rate of pay for your key performers can be challenging. You do have tools at your fingertips including data supplied by the U.S. Bureau of Labor Statistics at

BLS data can reveal the salary breakdown for pay by job title. Further, it can show average wages for certain fields, industries, metropolitan areas and states. Understand the salary ranges for your area and make certain that your top performers are compensated accordingly. You may need to approach upper management to make an exception for one employee to bring that person up to a pay scale level that is competitive within your industry.


When interviewing most of your employees, you will go over a standard evaluation sheet, discuss strength and weaknesses and offer suggestions how that person can improve his work. This is the standard way to evaluate, but it should not be used for your best workers.

Your top performers have heard it all and do not need to be instructed on how to improve their work. Instead, you can use your time with this individual to ask for tips on how you can improve the business. With this type of interview, you are showing your best worker that you value his or her input. Once done, you can explain your compensation plan for the coming year.

Review Considerations

Employee year-end reviews are always a stressful time for managers and employees alike. Typically, you should have your review paperwork submitted to Human Resources before November. This will give HR time to review your evaluations, make suggestions and receive upper management approval.

Year-end interviews should be conducted and completed during the first half of December. Of course, not everyone will like their review, but if handled diplomatically and respectfully, you can ease the pain for your average performing workers while still rewarding your best employees, the individuals that contribute the most to your business.


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