Possibly the only thing more awkward than the lethargic, day-after-office-party march through the sea of shifty eyes and grins to your desk is the year-end annual review that you give your employees.

Most everyone dreads year end reviews, and because so few managers understand how to properly deliver one, these reviews typically turn into hour-long, demoralizing interrogations.

Providing feedback to your team, however, is an essential part of developing a productive work culture. More important, it is tool for you to identify employees who are unproductive or simply do not fit in.

While employee performance reviews get a bad wrap, statistics demonstrate that some kind of "feedback mechanism" is important for employees. Feedback mechanisms include more than just annual reviews. They are any strategy used to provide professional development to employees.

According to Gallup, 87 percent of millennials and 69 percent of non-millennials say that "professional or career growth and development opportunities" are important consideration in a job.

Moreover, a well-delivered annual review can serve as much more than a review. It can serve as a tool to empower and engage your team and set important expectations.

In another study, 70 percent of employees ranked "empowerment" to take action to resolve a problem encountered in their jobs as an important aspect of their engagement. Also, higher workplace engagement leads to 41 percent fewer safety incidents and 41 percent fewer quality defects, as well as 37 percent lower absenteeism.

So how do you provide an annual performance review that engages the employee?

First, start by asking yourself about your goals are for the review. What do you hope to achieve by sitting with each individual employee? Generally speaking, you want to identify the following (not necessarily in order of importance):

  • Measure performance
  • Enforce productive characteristics
  • Identify poor characteristics and means through which to improve
  • Provide goals against which to measure improvement or success
  • Inspire and motivate to be productive member of the team
  • Measure and enforce cultural fit

Once you understand your goals, you need to then focus on the specific job or responsibility you will be discussing. Every job is different and each carries its own set of performance measures. You can start by considering the specific traits or characteristics required to succeed at the job the employee is filling. For example:

  • Information Technologies - Technical expertise, analytical skills
  • Sales - Personable demeanor, ability to clearly communicate ideas
  • Finance - Analytical skills, focus, attention to detail

Next, you need a review process that will set "next steps" for the employee. Ultimately, as a pair, you want to identify 1) what is needed by the employee to make a more positive impact on the organization and 2) what is needed by the employer to provide the work environment in which to succeed.

You should consider the performance review as an experience, not a task. While you can have everything written down, the benefit of a review is in the open discussion, one in which the conversations often does not follow a specific order.

Start with an outline of what is to be discussed.

  1. Identify achievements and areas of their contribution that are working well (strengths).
  2. Identify areas of needed improvement (weaknesses), being certain to offer and discuss the evidence supporting your critical feedback.
  3. Discuss means of improving these problem areas. What does the employee need to do to improve. What do you need to to support and encourage improvement?
  4. Set specific, measurable, attainable, and relevant (S.M.A.R.T) goals to be accomplished by a specific date (Example: "Identify 20 new business client leads by April 1" versus "be better at sales"). It is important that these goals are discussed and agreed upon by both of you in order to get agreement and "buy-in".
  5. Close by re-emphasizing the positive points and discuss how the employee has made a positive contribution to the company.

Lastly, I personally believe it is very important to ask employees to conduct a self-review prior to meeting. Ask them to answer the same questions and measure their performance and cultural fit against the same criteria as you. Also, have them consider their goals moving forward, against which you can compare your expectations.

Given this responsibility, employees are often very honest, and they are more likely to embrace aggressive goals and performance measures if they have already considered it themselves.

So if you have a month-long hangover from all of your holiday parties and activities and are dreading the delivery of year-end annual reviews, douse your eyes in Visine, lighten the mood with an ugly holiday sweater, and offer your team a positive road forward.