A performance review, sometimes called an appraisal, is a structured conversation between a manager and an employee about how their work is going: what’s going well, what needs support, and what they’re working towards next. Done well, it’s a two-way conversation backed up by a written record, not a box-ticking exercise or a surprise. This guide includes a step-by-step section further down covering exactly how to plan and run one.

In short:

What a performance review is

A performance review is a chance to discuss an employee’s work in a structured way: what they’re doing well, any areas for improvement, whether they need more support or training, and their career or development objectives. It’s sometimes called an appraisal, and the two terms are generally used to mean the same thing.

Not by a specific law, no. Acas recommends that employers conduct regular performance reviews for anyone with the legal status of employee, and suggests doing this at least once a year as good practice.

Someone is less likely to have employee status if they’re an agency worker, a casual worker, or on a zero-hours contract. Employers might still choose to review the performance of people with worker status, since it can help maintain good working relationships and support their development, but it isn’t expected in the same way.

What a performance review should cover

How a review is structured varies by organisation, but performance reviews tend to draw on a combination of things: whether the employee is meeting or has met any agreed objectives, whether they’re demonstrating the right behaviours in their work, and whether they’re following an agreed development plan, such as any ongoing training.

A review is also a chance to resolve performance issues early, by giving the employee an opportunity to explain what’s getting in the way and ask for support, rather than letting a problem build up unaddressed.

How to set good performance objectives

Objectives should be fair and reflect the employee’s usual tasks and workload, though they can also stretch someone to develop in a particular area. Acas recommends objectives are SMART: specific, so it’s clear what the employee will actually do; measurable, so it’s clear whether it’s been achieved; achievable and realistic; relevant to their job and responsibilities; and time-bound, with a reasonable timeframe attached.

For example, an employee and their manager might agree to reduce average customer email response time by 48 hours (measurable), by using response templates and automatic acknowledgement emails (achievable), reviewing progress in regular check-ins and revisiting the objective in three months (time-bound).

How often performance reviews should happen

At least once a year as a formal review, though this shouldn’t be the only time performance gets discussed. Acas recommends pairing formal reviews with regular informal conversations, such as sharing feedback as it happens, coaching, and regular one-to-one check-ins. Waiting a full year to raise something that could have been addressed in a five-minute conversation rarely helps either side.

What happens after a performance review

It’s important to keep a written record of what was discussed and agree it with the employee, sharing a copy with them afterwards. Storing that record alongside other employee records makes it easier to track progress against the same objectives at the next review, rather than starting from a blank page each time.

When a performance review uncovers a problem

Sometimes a review surfaces a genuine performance issue rather than just an area for minor improvement. This is a bigger topic in its own right, generally involving a more formal, structured conversation, a clear improvement plan, and proper documentation, since it can eventually lead toward capability or disciplinary processes if performance doesn’t improve. Acas has separate guidance on handling performance problems that’s worth reading in full if this applies.

Step by step: how to plan and conduct a performance review

  1. Set the date well in advance. Give both the employee and yourself enough notice to prepare properly, rather than scheduling it in the same week it happens.
  2. Review what happened last time. Look back at the objectives and any development plan agreed at the previous review, along with notes from check-ins since, so the conversation builds on what came before rather than starting cold.
  3. Ask the employee to prepare too. A short self-assessment, covering what they think has gone well and where they’d like support, turns the review into a two-way conversation rather than a one-way delivery of feedback.
  4. Gather evidence, not impressions. Pull together specific examples tied to their objectives and behaviours over the period, rather than relying on a general sense of how things have gone.
  5. Hold the conversation somewhere private. Whether in person or online, the employee should feel able to speak openly without being overheard or rushed.
  6. Cover progress against objectives and behaviours first. Talk through what’s gone well before moving on to areas for improvement, and leave room for the employee to respond and add their own view.
  7. Address any performance concerns constructively. If there’s a genuine issue, be specific about what needs to change and by when, and offer the support that would actually help, rather than leaving it vague.
  8. Agree new SMART objectives together. Objectives that are specific, measurable, achievable, relevant and time-bound give both sides something concrete to work towards and refer back to next time.
  9. Write it down and share it. Keep a written record of what was discussed and agreed, and give the employee a copy, rather than letting it live only in a manager’s private notes.
  10. Follow up before the next formal review. Use regular check-ins to track progress against the objectives agreed, so nothing sits untouched for another year.

Tips for running an effective performance review

The benefits of managing performance reviews inside an HR system

Running reviews through email threads, shared documents or paper forms works fine for a handful of reviews, but it gets harder to stay on top of once a business has more than a few people, or more than one review cycle running at once. Objectives get lost between documents, reminders rely on someone remembering, and there’s no single record to refer back to once the next review comes round.

Keeping reviews inside the same system as the rest of the employee record solves this in a few concrete ways: objectives carry over automatically from one review to the next instead of being retyped, reminders go out to employees and managers without anyone needing to chase them manually, and every past review sits alongside that employee’s other HR records rather than in a separate folder, inbox or spreadsheet.

How performance reviews work in Sense HR

In Sense HR, a review is launched directly from an employee’s record, which automatically notifies the employee with a task to complete their section, followed by their manager once the employee has saved their input. Past objectives and notes stay attached to the employee’s profile, so managers aren’t starting from a blank page at the next review. Reporting shows which reviews across the team are complete, overdue or still to be scheduled, so a review cycle doesn’t quietly slip once things get busy.

Performance reviews that don’t get forgotten

Keeping review cycles on track gets harder as a team grows, and objectives set a year ago are easy to lose track of. Sense HR’s performance module keeps review records, objectives and reminders in the same HR software as the rest of the employee record, with workflows that prompt managers and employees automatically rather than relying on someone remembering.

Explore Sense HR’s performance module →