Performance Appraisals

Introduction

Performance reviews are among the most dreaded activities in management—both for givers and receivers. Yet Grove argues they’re among the highest-leverage activities a manager can perform. Done well, a review shapes someone’s performance for months or years. This chapter explains how to do them well.

Why Reviews Matter

A performance review is one of the highest-leverage activities available to a manager:

The Leverage of Reviews

• A few hours of preparation and conversation
• Affects someone’s performance for 6-12 months
• Shapes career direction and motivation
• Documents expectations and agreements

“The performance review is the single most important form of task-relevant feedback we as supervisors can provide.” — Andy Grove

Two Assessments

Every review should include two distinct assessments:

Performance vs. Potential

Performance Assessment: How did they do against objectives?

• Results achieved
• Quality of work
• Meeting commitments
• Past-focused

Potential Assessment: What might they achieve?

• Growth trajectory
• Capability development
• Readiness for more
• Future-focused

Someone can have high performance but limited potential (peaked), or low performance but high potential (developing). These require different conversations.

Delivering the Review

Grove provides specific guidance on delivering feedback effectively:

Delivery Principles

1. Be direct: Don’t bury criticism in praise
2. Be specific: Use concrete examples, not vague generalizations
3. Be balanced: Include both strengths and areas for growth
4. Focus on behavior: What they did, not who they are
5. Listen: Make it a dialogue, not a lecture

The “Breakfast and Lunch” Problem

Grove identifies a common failure mode: managers give glowing reviews all year, then are surprised when the employee is shocked by criticism during the formal review.

The Surprise Problem

If your review contains surprises, you’ve already failed. Feedback should be continuous throughout the year. The formal review summarizes and documents what should already be known.

Giving Negative Feedback

Negative feedback is difficult but essential. Grove’s approach:

Delivering Difficult Messages

• Don’t avoid it: Failing to address problems is unfair to the employee
• Be specific: “Your code reviews lack detail” not “You need to improve”
• Explain impact: Help them understand why it matters
• Offer path forward: What specifically should change
• Follow up: Check progress on improvement areas

The Written Review

Grove insists on written reviews. Writing forces clarity and creates a record.

Elements of Written Review

• Summary of performance against objectives
• Key strengths demonstrated
• Areas requiring improvement
• Specific development actions
• Objectives for next period

Levels of Performance

Grove suggests thinking about performance in distinct levels:

• Exceeds: Consistently surpasses expectations
• Meets: Fully meets role requirements
• Below: Not meeting some requirements

Be honest about which level applies. Rating everyone “exceeds” makes the system meaningless.

Key Takeaways

• Performance reviews are high-leverage—hours of work affect months of performance
• Assess both performance (past) and potential (future)
• Be direct, specific, and behavior-focused
• Reviews should contain no surprises—give continuous feedback year-round
• Write the review—writing forces clarity
• Be honest about performance levels