The Secret to a 5 Star Performance Review

Mar 26, 2021 | Blog

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The Secret to a 5 Star Performance Review

How to Tell Your Employee They Aren’t a Unicorn but Still Special


When I give performance reviews, I use the same system, wherever I may be working. I work with the principle of 5 stars. I explain this before every review so I’m sure the person I’m reviewing knows where they stand and why. It is easy for people to use their own system ahead of time, then face disappointment when their assessment doesn’t match up with their boss’s. There is a tendency to award lots of 4’s and 5’s, but trust me: once you see my system you’ll understand why these numbers are rare.

First, let me describe what each number means starting with 3. This is the baseline for the whole process.

As a baseline, 3 represents that you’re doing your job. That is great. There is nothing wrong with a 3. That is what you get paid for. You do your job. In most categories you will be a 3, and most people will be a 3. If I think, “Bob is great he does his job, shows up on time, no complaints from me,” that is a solid 3. In individual categories for an overall 3, I look for places to discuss either danger spots of them dipping to a 2, or areas they could reach a 4 with a little more consistent effort.

Next, let’s talk about 2s and 4s.

A 2 is not performing at the expected level of their work. A 2 should not be a surprise. The issues have been discussed, you have put together a performance improvement plan, and this annual review falls over this improvement plan period. Note it and discuss it, and this is a good time to see if this person needs any support. Hopefully, you are doing this regardless, but any touchpoints with your employees are important, especially for one that is struggling. Usually, I give 0 to a couple of these on a performance review again depending on previous issues discussed.

I can’t say this strongly enough: it is imperative to avoid surprises, as they can derail and demotivate. DO NOT wait till a yearly performance review to tell someone they need substantial improvement. Deal with this in a timely manner separate from the review.

A 4 goes beyond the expected and exceeds normal expectations consistently. I want to stress the word consistently. Often, employees say, “remember that one time I came in early,” or “that one time I did this other thing.” My answer is usually “Yes and thank you for doing that.” Hopefully, you thanked them when they did it, too. Once in a blue moon isn’t exceeding the normal expectations. No, exceeding expectations is consistently showing that effort. You see this in your rising stars, and you should be noting their consistent performance, acknowledging it, and now rewarding it. Here I try to find at least one category the employee excels in and give examples emphasizing the consistency of the behavior and the appreciation of the extra effort.

The outliers here are truly outliers.

As I tell my employees if you were a 1, we wouldn’t even be talking at this point, or it would be a different conversation at least. 1’s are people who failed to improve on a performance improvement plan and just didn’t rise above, for whatever reason. So, with that in mind, I generally never have a 1 on my employee reviews. There are always exceptions, but I consider it a failure on my part as a manager and a leader to let things get to this point without a prior discussion.

A 5 is for Olympic athletes and unicorns. They consistently go above and beyond what is expected of them, as well as providing expertise or inspiration for that category of the evaluation. These are not only rising stars but hopefully, you have earmarked them for fast-tracking or promotion. You have already discussed their growth, and you have a plan for this individual. They are hard to keep and so it is important to keep them engaged and aware that their efforts and work are acknowledged and appreciated. As with a 2, a 5 on a performance review, should not be a surprise. This process is simply in the midst of their transition to their new role of bigger and brighter things.

Overall, in this system most employees receive 3’s, and ideally at least one 4 to demonstrate their expertise and commitment. Your employees who are working on improving may have a 2, but there’s an improvement plan in place. Rising stars who are growing into new things have their 5. You already filtered out the 1s prior to this process.

The scarcity is important, and it sets reasonable expectations for employees. All the more so, since most companies do not reward equal financial compensation during annual reviews. Why tell an employee that they are a rock star to make them feel good, but compensate them as if they aren’t? Hopefully, you can provide more than financial reward for your employees, but that is another discussion.

In the end the key is to give a fair assessment of your employees and coach them on ways that they can improve. Be upfront about this process. Correct unwanted behavior early, not during reviews. Track rising stars in a timely manner so that you don’t lose them. Instead, put them on a path of growth and success. Over time you’ll get more 4s, weed out potential 1s, and attract more unicorns. Who doesn’t love horses who can stab with their head?

Those are secrets to a 5 star performance review. Let me know if you have any secrets for performance reviews in the comments below. Also, be sure to check out my podcast!



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