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The Annual Review: An Employee’s Guide

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Few events in the corporate world generate as much fear and uncertainty as the employee annual review. Generally, this is the one time during the year where your manager is supposed to present detailed feedback on your performance, discuss your development plan and next steps in your career, and prepare an update on your merit increase or other types of compensation changes. The vast majority of the time this does not happen. If your company is anything like the four corporations I have worked for, then your (oftentimes clearly) uncomfortable manager, who is likely rushed for time and focused on his or her next meeting, will provide some generic feedback on your performance before handing you a sheet of paper that outlines your 1-4% pay increase for the following year. Disappointment ensues.

The purpose of this post is to give insight into the annual review process and present concrete tips on how you can turn the review into a meaningful discussion about your strengths, opportunities for improvement, and development needs. But before we begin I recommend you read my prior post titled, The Annual Review: A Manager’s Guide. Take your time, I’ll wait here. Done? Good. Now you have insight into what a good manager should do to prepare and execute a strong annual review process. The tips I share in this post will not only help you prepare for your annual review, it will also make your manager prepare for your review.

Before we dive in, I want to address one major misconception about the annual review. Most employees think the review is the one time during the year to make the case for a pay increase or a promotion. However, in the vast majority of companies, compensation has already been decided before the annual review. If you try to make a strong case for more pay at the review, you are already too late. But don’t worry, the guide below will not only optimize the review experience, it will also position you well for increased compensation and responsibility.

So now, without further ado, here are the steps you should follow to take the annual review process from good to great:

 

Prepare early!

As I stated earlier, most companies conduct their internal talent assessment and compensation planning processes one to two months prior to the formal annual review. If you want to jump to the front of the line for a plumb promotion or large pay increase, you need to start planting seeds early. How should you do this?

  1. About two months before “annual review season” set up a one-on-one meeting with your manager. In the invite, say something like, “I realize you are very busy, but I want to help you plan for the annual review process. At this planning meeting, I would like to share with you some initial thoughts as to what is going well, where I need help, and how I am thinking about my development. At the end of this planning meeting, I am hoping we will have a mutual understanding of my performance to date so we are both better prepared for the annual review.” Also, share your top three job objectives with your manager and make sure your priorities are aligned. This meeting does many things: it lets your manager know you take the review process seriously, that you are open to honest feedback, and that you want their help with development planning. Any good manager would appreciate the initiative shown by an employee who is willing to have this discussion in advance of the annual plan.
  2. Be honest with yourself. Take some time to really focus on your strengths and weaknesses. Ask your peers, mentors, and any direct reports you have to give you honest feedback. What do you consistently do well? Where do you need help?
  3. Track results. Employees are paid (and get ahead) by delivering results. One of the most common roadblocks for employees is that they confuse working hard with getting results. Don’t make this mistake! If you had the pre-meeting as outlined in Step 1 (above) you will know what your manager’s priorities are. Once you know them, track your progress against them. Be as detailed as possible to show how your contributions are helping the team succeed.  Quantify whenever and wherever possible. Use statements like, “the marketing campaign I developed increased sales by 13% in the second quarter against a planned target of 8% growth.” Avoid comments like, “yeah, we didn’t hit our revenue targets, but I worked really hard and worked nights and weekends.” Again, I can’t be clear enough: employees are paid to drive results, not work hard. Demonstrating results is the number one thing you can do to turbocharge your career.

 

Bring in opportunities for improvement.

We often forget that managers are human beings. Humans struggle with providing direct, honest feedback, especially when people are struggling. Help your manager out by providing concrete examples. Like the previous section, be very specific and, importantly, focus on what you learned from your failure. A good example would be, “I know I had an opportunity to improve on marketing campaigns. I had a target to deliver 10% growth on the Q1 campaign but unfortunately we were only able to recognize a sales increase of 4%. I conducted an after-action report and realized I did not have support from major distribution partners. In the future I will make sure that all key stakeholders are engaged before launching a new campaign.”

  • Notice the formula: Admit your miss, understand the root cause of your miss, and then show how learning from this failure will make you better in the future. This is gold to managers and shows you are accountable and proactive.
  • One important note: NEVER assign blame. Even if you are right and it was someone else’s fault, acknowledge the failure and your role in it, state what you learned from it, and move on. Nobody looks good when fingers are pointed.

 

Communicate your career goals (short and long-term) and put together a development plan to achieve those goals.

In the pre-review meeting, share you career goals and development plan with your manager to get his or her input. Of course you want their feedback, but what you are really doing is letting your manager know what you want to do next as they will be forced to think about development and succession planning as their pre-work in the annual review process. I recommend you have one short-term and one long-term goal, and think of goals not just a job titles but as opportunities. For example, if you are a new finance manager and your long-term goal is to be a VP of Corporate Development M&A (mergers & acquisitions), you might say something like, “long-term, I really would like to become a VP of Corporate Development. In order to do so, I would like more exposure to the M&A process whether it be early state strategy development, managing the M&A funnel, supporting due-diligence, or post-acquisition integration. Do you foresee any opportunities like these I can support in the next 12 months? If not, can you think of any other opportunities I could be exposed to that would help me better understand a role within M&A?”

Also, for development planning, think beyond coursework (internal or external) and into mentoring or mentoree opportunities, access to career broadening projects, or even voluntary work inside or outside the company. My experience is that classroom development tends to be too academic and you are likely much better off with experiential learning. (Note: Many people bring up an MBA as part of their development plan. Be careful. I recommend you read two of my other posts entitled, What is the Value of an MBA and, Should I get an MBA? before taking this route.)

 

Take control of the annual review.

A good annual review is a conversation, not a one way discussion with your manager providing feedback then giving your merit increase/bonus. Ask for honest feedback. Ask for clarity if something is not clear. Think about what you need to excel in your current role and ask your manager for his/her support. Good managers will ask you to provide feedback on them. Be prepared to do so (keep it positive, of course…).

I strongly recommend getting comfortable with the steps above and practicing them before your next annual review. One of the most common sources of employee dissatisfaction is not having development planning taken seriously and not seeing a clear career path. If you follow the steps in this blog, you will communicate your development needs and career aspirations to your manager in time to actually impact your performance rating and compensation planning. More importantly, you will build a stronger rapport with you manager and will set yourself apart from the vast majority of passive employees who go into the review without a plan, willing to accept whatever is handed to them.

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