How do you improve the performance review process? You improve the performance review process by fixing the parts around the review form, not just the form itself: link goals to company priorities, add regular check-ins, anchor ratings to evidence, calibrate before results are final and hold the pay conversation separately. A performance review process is the cycle of planning, checking in, assessing and rewarding work; the review meeting is only one moment in it.
This guide is for CPOs and People leaders at UK and Irish companies with 100 to 1,500 employees who have just finished, or are about to start, a review cycle that nobody enjoyed. It answers one of the most common Google searches in this topic, and every step comes with the reason it works and the evidence behind it.
Key takeaways
- Gallup's 2019 research found only 14% of employees strongly agree their performance reviews inspire them to improve, so the process, not just the form, needs redesigning.
- McKinsey's 2018 survey of 1,761 respondents found that when goals were linked to business priorities, 46% rated their performance management effective, against 16% when they were not.
- The CIPD evidence review recommends separating development conversations from pay and promotion decisions, because ratings given for development tend to be stricter and draw on a wider range of examples.
- Ratings say as much about the rater as the person rated, so anchor every rating to a written example and calibrate before results are shared.
- Start by measuring your current cycle: time spent, slippage and how fair employees felt it was, then fix the two weakest steps first.
What a performance review process is, and what it is not
A performance review process is the whole loop that turns work into decisions: setting goals, checking progress, assessing results and behaviours, calibrating across teams, and acting on the outcome through development, pay or promotion. It sits inside your wider performance management framework, which defines what good looks like at each level.
- It is a repeatable cycle with owners, dates and a written record at each stage.
- It is not the annual form. If the only moment anyone thinks about performance is when the form opens, the process is the form, and that is the problem.
- It is not the pay review either. Pay can draw on review outcomes, but merging the two conversations changes what people are willing to say.
Most complaints about reviews are really complaints about a missing stage. The case against the once-a-year model is set out in why annual reviews fail growing companies; this guide is about what to put in its place.
Where review processes break, stage by stage
The US Office of Personnel Management describes performance management as a cycle of planning, monitoring, developing, rating and rewarding, and its 2025 performance management and accountability playbook asks agencies to sign off plans within the first 30 to 45 days of a cycle and to hold bi-weekly check-ins. The stages travel well to private companies. Use this table to find your weakest one.
| Stage | What usually breaks | What to change | Evidence behind it | Owner |
|---|---|---|---|---|
| Plan | Goals are set late, copied from last year or never linked to company priorities | Agree goals within the first month and tie each one to a company or team priority | McKinsey (2018): 46% effective with linked goals vs 16% without | Manager and employee |
| Monitor | Nobody looks at goals between reviews, so the review is a memory test | Short fortnightly or monthly check-ins with notes | Gallup (2019); OPM playbook (2025) | Manager |
| Develop | Development is squeezed into the last five minutes of the pay discussion | Hold a separate development conversation with its own record | CIPD evidence review (2016) | Manager, supported by People team |
| Rate | Each manager uses the scale differently; ratings reflect the rater | Anchored rating scale, an example for every rating, calibration before sharing | HBR on Deloitte (2015) | People team and department heads |
| Reward | Pay outcomes are hard to explain, so the whole process feels unfair | Publish how ratings feed pay and promotion; discuss pay in its own meeting | McKinsey (2018); Gallup (2019) | People team and Finance |
7 steps to improve the performance review process
1. Measure the cycle you have before redesigning it
Record how long the last cycle took from launch to final ratings, how many reviews were late, how many hours managers spent and what employees thought of it. The CIPD calls this "appraising the appraisal": ask people afterwards whether their review felt fair and useful. Why: without a baseline you cannot tell whether a change helped, and the weakest stage is often not the one leaders assume. The performance review cost calculator turns manager hours into a number the leadership team will notice.
2. Link every goal to a company priority, and revisit it
Each individual goal should name the team or company priority it supports, and goals should be reviewed at least twice a year, not only at year-end. Why: in McKinsey's 2018 survey, 62% of respondents with effective performance management said goals were revisited at least twice a year, and linking goals to priorities was one of the three practices most associated with a system people saw as fair.
3. Replace the annual surprise with regular check-ins
Set a fixed rhythm of short one-to-ones, fortnightly or monthly, with three questions: what moved, what is blocked, what support is needed. Keep a short written note each time. Why: Gallup found that employees who receive meaningful feedback weekly rather than annually are 5.2 times more likely to strongly agree that the feedback they get is meaningful, and Acas guidance advises regular informal check-ins between formal reviews. The notes also give the formal review its evidence.
4. Separate the development conversation from the pay conversation
Hold the review that discusses strengths, gaps and growth at a different time from the one that confirms pay. Why: the CIPD review found that ratings given for development purposes tend to be stricter and draw on a wider range of examples than ratings tied to pay, and Gallup recommends the same split. When money is on the table, both sides defend rather than learn.
5. Use a rating scale anchored to evidence
Define each point on the scale in plain words for each level, and require a dated example for every rating, especially the highest and lowest. Why: when Deloitte studied its own process, reported in Harvard Business Review in 2015, it found ratings revealed more about the person giving them than the person receiving them. Our guide to choosing an employee performance rating scale compares the common designs.
6. Calibrate before anyone sees a rating
Bring managers together by department to compare proposed ratings against the same bar, starting with outliers and anyone near a promotion or performance threshold. Why: calibration is where one manager's "exceeds" gets tested against another's, so ratings mean the same thing across teams. Keep it focused on evidence, or it turns into the debate described in how to stop calibration becoming theatre; the step-by-step calibration meeting guide sets out the agenda.
7. Train managers to coach, not just to complete the form
Give every manager a short session on running check-ins, writing evidence-based reviews and having difficult conversations, then observe one review each. Why: McKinsey found that where managers coach effectively, 74% of respondents called their performance management effective, against 15% elsewhere, yet fewer than 30% said their managers did this well. Our manager training plan for performance reviews covers what to include.
Risks when you change the process
- Risk: more check-ins become more admin. Safeguard: cap check-in notes at three lines and drop any form field nobody uses in calibration.
- Risk: managers treat the new rating scale as a quota. Safeguard: state in writing that calibration tests evidence and never forces a distribution.
- Risk: separating pay makes the review feel pointless. Safeguard: publish how review outcomes feed the pay decision, so the link is clear even though the meetings are apart.
- Risk: changing everything at once overwhelms a small People team. Safeguard: fix the two weakest stages from the table this cycle and the rest next cycle.
Before you launch, the performance review checklist for HR managers helps you catch the practical gaps, from dates to templates.
How to tell the new process is working
These are playbook guidance, not research findings. Compare them with the baseline you took in step 1 over two cycles.
- The cycle finishes on time, measured against the timeline you published; our guide on how long a review cycle should take gives benchmarks to plan against.
- The share of employees who say their review was fair and useful rises in the post-cycle pulse question.
- Fewer ratings change in calibration, because managers arrive with evidence.
- Check-ins happen at the agreed rhythm in most teams, not just the keen ones.
- Managers report spending fewer hours per review than last cycle.
Our perspective
When People leaders ask me how to improve their review process, they usually start with the form: new questions, a new scale, a new template. The form is rarely the problem. Reviews go wrong because nothing happened in the eleven months before them, so managers write from memory and employees hear things for the first time. Fix the rhythm first. If check-ins happen and goals are written down, a plain form works. If they do not, the best form in the world will still produce a cycle everyone dreads.
Ash
Where Revolut People fits, and where it doesn't
Most of the steps above are habits, and software only helps if it removes the admin around them. In Revolut People, goals cascade from company to team to individual, so the link in step 2 is visible rather than assumed. Each review uses a three-part scorecard of goals, skills and values, with skills scored against a competency framework for the role and level. Calibration dashboards suggest a grade from several inputs and flag outliers such as lenient managers, so the meeting spends its time on exceptions. Sertis, for example, describes cutting its self-review cycle from a month to a week in the Sertis self-review story.
The honest limit: no tool makes a manager hold a good check-in or have a difficult conversation. That still takes training and a People team that follows up. Start with the free two-minute performance health check to see which stage is weakest. If you then want to test the fit, a 15-minute discovery call is a fit-check: bring last cycle's timeline and review form, and you will leave knowing which two steps to fix first, whether or not Revolut People is right for you.
A first 90 days plan
| When | What to do | Owner |
|---|---|---|
| Days 1 to 30 | Measure the last cycle (time, slippage, manager hours, employee view); pick the two weakest stages from the table; agree the check-in rhythm | People team |
| Days 31 to 60 | Link goals to company priorities; publish the anchored rating scale; train managers on check-ins and evidence-based reviews | People team with department heads |
| Days 61 to 90 | Run check-ins and log notes; schedule calibration and a separate pay conversation for the next cycle; send a short fairness and usefulness pulse after it | Managers, People team and Finance |
For a printable version of the run order, the one-page review cycle checklist lists each step with its owner.
Bottom line
A review cycle rarely fails at the meeting itself; it fails in the months before, when goals drift, feedback stops and evidence goes unrecorded. Pick the two stages where your process is weakest, fix them this cycle and measure the difference before touching the rest. Companies of 100 to 1,500 people do not need a heavier process, only a more regular one. Done well, the review becomes a short confirmation of conversations that already happened.
FAQ
What is the best performance review process?
There is no single best process, but the strongest ones share a pattern: goals linked to company priorities, regular check-ins through the year, a short written review against a clear rating scale, calibration before ratings are final, and a separate conversation about pay. The CIPD evidence review (2016) adds one more habit: ask employees afterwards whether the review felt fair and useful, then fix what they flag.
How often should performance reviews be conducted?
Acas guidance, last updated in 2026, says to hold a formal review at least once a year and to support it with regular informal check-ins. Many growing companies now run a short formal review every quarter or half-year, with fortnightly or monthly one-to-ones between them. Pick a rhythm your managers can keep, because a quarterly cycle that slips is worse than a well-run half-year one.
How long should a performance review be?
Playbook guidance: the meeting itself rarely needs more than 45 to 60 minutes if the evidence has been gathered beforehand through check-ins and a self-review. The written review should fit on one or two pages: a rating per area with an example, two or three strengths, one or two development priorities and the next goals. If a review takes hours, the problem is usually missing evidence, not too little time.
What happens in a performance review?
The manager and employee look back at results against agreed goals, discuss how the work was done against the expected skills and behaviours, and agree development priorities and goals for the next period. A good review holds no surprises because issues were raised in check-ins. Acas recommends keeping a written record of what was agreed and sharing it with the employee, so both sides can refer back to it.
Are performance reviews necessary?
Some form of review is, because people need to know where they stand and companies need a fair basis for pay and promotion decisions. What is optional is the heavy annual format. Gallup's 2019 research found that only 14% of employees strongly agree their reviews inspire them to improve, which argues for fixing the process rather than dropping it: more frequent, shorter conversations, with pay discussed separately.
Sources
- CIPD: Could do better? Assessing what works in performance management, evidence review by Jonny Gifford (2016)
- Gallup: More Harm Than Good: The Truth About Performance Reviews, Robert Sutton and Ben Wigert (2019)
- McKinsey & Company: Harnessing the power of performance management, survey of 1,761 respondents (2018)
- Harvard Business Review: Marcus Buckingham and Ashley Goodall, Reinventing Performance Management (2015)
- US Office of Personnel Management: Performance Management and Accountability Playbook (2025)
- Acas: Reviews and appraisals: performance management (updated 2026)