Employee Performance Review: Complete Guide with Examples

Most managers just wing employee performance reviews. They throw together some generic comments and call it a day. Then they wonder why nothing changes.

When done right, good employee performance reviews make your team stronger and your business run smoother. This guide shows you exactly how to do them—with templates you can actually use, real examples, and phrases that work.

TL;DR: Employee performance review best practices

Employee performance reviews give you an opportunity to check how your team performed over a set time period. Use them to celebrate wins, fix problems, and set clear goals moving forward.

What matters most:

• Use a template: Cover goals, strengths, areas to improve, and next steps every time.
• Get specific: “Stayed calm during the dinner rush when two servers called out” beats “good under pressure.”
• Balance your feedback: Two positive comments for every improvement area.
• Document everything: These reviews protect your business legally.
• Don't wait a year: Quarterly check-ins catch problems before they get big.

Every review needs:

• Employee basics and goal check-in
• What they're doing well and where they've contributed
• Growth areas and development plans
• Clear targets for next time

Good reviews should feel like helpful conversations aimed at helping your employees grow professionally. When your team knows where they stand, everyone does better.

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What is a performance review and why does it matter?

An employee performance review is where you sit down and evaluate how someone's been doing their job over a specific time period. Most places do yearly reviews, but smart businesses are switching to every few months or even monthly check-ins.

Reviews do more than just evaluate performance. They help align what your employees are working on with what your business needs. They recognize good work, address problems, and plan for growth. When people understand how their work helps the business succeed, they care more and do better.

On the legal side, performance reviews create important documentation for employment decisions. Whether you're promoting someone, dealing with performance issues, or making tough firing decisions, having documented reviews protects your business and ensures you're treating everyone fairly.

Employee performance review template: Structure and components

A good template keeps you organized and makes sure you cover everything important. Here's what works for most small businesses.

Essential sections for every employee performance review

This employee performance review sample shows the structure most businesses use successfully:

• Employee information: Start with the basics—name, job title, review period, who their supervisor is, and when they started. This creates a clear record and helps you track how they've grown over time.
• Goal assessment: Look at the specific goals you set during their last review or when they started their job. Did they finish safety training? Get faster at their tasks? Handle upset customers better? Be specific about what they accomplished and what they didn't.
• Core competencies evaluation: Check the skills that matter most for their job—communication, problem-solving, teamwork, and technical skills. Focus on behaviors you can actually see and measure.
• Accomplishments and contributions: Call out their wins, big and small. Maybe they stepped up during a busy day, came up with a better way to do something, or helped train someone new. Recognition keeps people motivated.
• Areas for improvement: Everyone has room to grow. Frame these positively—instead of “you're always disorganized,” try “getting better organized would help you handle busy times more smoothly.” Even better, suggest some specific action items your employees can try after the review.
• Goal setting: Set clear, specific goals for the next review period. Make sure these connect to both their growth and what your business needs.
• Career development: Talk about where they want to go and how your business can help them get there. Even if you can't promote them yet, you might give them new responsibilities or training opportunities.
• Overall rating: Sum up their performance with a number or description. This helps with pay decisions and tracking how they're doing over time.

Performance review rating scales

Pick a system that fits how your business works:

• 5-point scale: The most common approach uses “Exceeds expectations,” “Meets expectations,” “Partially meets expectations,” “Below expectations,” and “Unsatisfactory.” This gives you enough detail to recognize top performers while spotting those who need help.
• 3-point scale: Simpler systems use “Exceeds expectations,” “Meets expectations,” and “Needs improvement.” Works well for smaller teams where detailed scoring isn't necessary.
• Narrative approach: Some businesses skip numbers completely and focus on written feedback. Stops employees from obsessing over scores and encourages better conversations.
• Goal-based assessment: Track percentages against specific targets—like “hit 95% attendance goal” or “finished 3 of 4 required training sessions”. This Connects directly to things you can measure.

How to write an employee performance review: Step-by-step process

Good performance reviews need proper planning and a well-thought-out structure. Here's how to create reviews that actually help people improve.

Pre-review preparation

About 2 to 3 weeks before the review meeting, start gathering concrete examples of their work—attendance records, customer comments, any incidents, and notable wins or problems. Don't rely on your memory alone. Make sure you also talk to shift leads, other managers, and customers who work with this employee. Their input often reveals strengths or problems you might miss.

Compare what they're actually doing day-to-day with their official job description. Have their responsibilities changed? Are they doing great in some areas but struggling in others? For every piece of feedback—good or bad—have a real example ready. Instead of “great attitude,” prepare something like “when we got slammed during lunch and were short two people, you jumped in to help without being asked.”

Block at least an hour for the conversation in a private space where you won't get interrupted. Let the employee know what the meeting's about ahead of time so they can prepare too.

Homebase tip: Use Homebase scheduling to find meeting times that work around both your schedules and when they're not rushing to or from a shift.

Writing the review document

Start each section with what they're doing well. This sets a positive tone and makes them more open to hearing about areas they need to work on. People need to hear what's working before they can process what needs to change.

Learning how to write a performance review for an employee requires balancing honesty with encouragement. Follow the 2:1 rule: for every area that needs improvement, highlight two strengths. Or try the feedback sandwich: start and end with something positive, put what they need to work on in the middle. Reference their own goals or self-assessment too—this shows you're listening and helps get them bought in.

Use those specific examples you prepared. Focus on what people do, not who they are. “Showing up 10 minutes late three times this month affects team coverage” works better than “you have time management problems.”

Homebase tip: Use the manager logbook in Homebase to track specific wins and areas for improvement throughout the review period, so you have concrete examples ready.

Conducting the review meeting

Start by thanking them for their work and explaining that this conversation is about helping them succeed and grow. Make it clear you're on the same team working toward the same goals.

Go through the document section by section, giving them time to respond and ask questions. This should be a conversation, not you talking at them. Pay attention to their take on challenges and successes. They might have context you're missing or ideas for improvement you hadn't thought of. The best reviews are collaborative.

When it comes time to set new goals, don't just tell them what to do. Work together to set realistic, meaningful targets. Write down what both of you are committing to. What will they work on? What support will you provide? Who else needs to be involved? Clear agreements prevent confusion later.

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Employee performance review examples by situation

Real examples help you see how these principles work in practice. These employee evaluation examples demonstrate different approaches for various performance levels.

High performer review example

• Strengths focus: “Jennifer consistently provides excellent customer service during busy shifts while keeping the store organized. This quarter, 15 customers specifically mentioned her product knowledge and helpfulness. Her stockroom reorganization idea cut our restocking time by 20 minutes per shift.”
• Growth opportunities: “As Jennifer takes on more responsibility, building leadership skills would help both her career and our team. She could train new hires or lead our customer service improvements. We'll also look into inventory management training to prep her for a supervisor role.”
• Goal setting: “Next quarter, Jennifer will maintain her service level while mentoring two new employees and completing the inventory management course.”

Average performer review example

• Balanced approach: “Mike reliably gets his shift work done and follows safety rules consistently. His attendance has been excellent, and he finished the equipment training program. However, his task completion times run about 20% longer than target, and he's missed end-of-shift documentation twice this quarter.”
• Specific improvement areas: “To hit productivity targets, Mike needs to follow our workflow sequence and use the efficiency checklist. For documentation, we'll set up a daily review process.”
• Development plan: “Mike will work with our lead tech for one week and finish productivity training by month-end. We'll check progress weekly.”

Underperformer review example

• Clear expectations: “Lisa shows dedication and consistently follows our dress code and equipment care standards. However, her performance falls below standards in key areas. She's had attendance issues this quarter and hasn't completed the required PPE training despite multiple deadline extensions.”
• Specific examples: “On August 15th, Lisa's lateness meant we couldn't maintain proper coverage, causing delays for three clients. She arrived late six times total this quarter. The incomplete PPE training limits her effectiveness in certain work areas.”
• Improvement timeline: “Lisa must complete PPE training within two weeks and maintain consistent attendance for 30 days. We'll do daily check-ins and adjust her schedule to support success. If these standards aren't met, we'll discuss her continued employment.”

What to say in an employee performance review

Whether you're wondering what to say in a performance review as an employee or how to phrase feedback as a manager, the right words matter. Here are specific phrases that get your message across clearly and constructively.

Positive feedback phrases

Achievement recognition:

• “Your efficient patient check-in process cut wait times by 10 minutes during our busiest clinic hours.”
• “Your attention to detail during inventory counts helped us avoid running out of stock during the holiday rush.”

Skill acknowledgment:

• “You consistently find solutions when equipment breaks down or unexpected problems come up.”
• “Your clear communication with clients prevents misunderstandings and keeps our reputation solid.”

Growth observation:

• “You've gotten much better at time management since we talked about the task prioritization system.”
• “Your confidence in handling difficult customers has grown a lot over the past quarter.”

Team contribution:

• “Your willingness to cover shifts helps us maintain excellent customer service even when we're short-staffed.”
• “The positive energy you bring to work creates a better environment for everyone.”

Constructive feedback language

Improvement areas:

• “Building stronger organizational systems would help you handle multiple priorities more effectively.”
• “More focus on following our standard procedures would improve consistency in customer experience.”

Behavioral feedback:

• “When you check your phone during customer interactions, it can look unprofessional and hurt service quality.”
• “More participation in team meetings would help us benefit from your insights and experience.”

Goal-focused:

• “To move up in your career, developing presentation skills would open new opportunities.”
• “Finishing the certification program by quarter-end will position you for the assistant manager role.”

Support-oriented:

• “I'm here to help you succeed—let's set up weekly check-ins to talk about your progress and any challenges.”
• “What's preventing you from reaching these goals? How can we remove those obstacles together?”

Goal-setting language

SMART objectives:

• “Finish safety certification renewal within 30 days and maintain 100% compliance with protocols.”
• “Hit client satisfaction scores of 4.5 or higher on monthly service surveys.”

Development goals:

• “Attend the industry safety training workshop this year to stay current with best practices.”
• “Mentor one new team member through their first 60 days to develop leadership capabilities.”

Performance targets:

• “Maintain 95% attendance rate while giving two weeks' notice for any planned time off.”
• “Finish all assigned training modules within one week of assignment.”

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Annual employee review vs. ongoing performance management

The traditional annual performance review is evolving. Adobe, for example, ditched annual reviews in 2012 after finding them stressful and pointless for employees. Instead, they started doing regular check-ins throughout the year. Real-time feedback works way better than waiting 12 months to tell someone they need to improve.

Benefits of regular check-ins

Think about it—if someone's struggling with customer service, why wait a whole year to address it? Monthly or quarterly conversations let you fix problems while they're still small. When you catch someone doing great work and tell them right away, they know exactly what to keep doing.

Nobody wants to sit through a review full of surprises. Regular check-ins mean your team always knows where they stand. The annual review just becomes a summary instead of some big scary evaluation. When people get ongoing feedback and recognition, they actually care more about doing good work.

Homebase tip: Use Homebase's team messaging to give quick feedback and recognition in real time, so performance conversations don't have to wait for formal reviews.

Employee performance evaluation best practices for small businesses

Small businesses face unique challenges with employee performance evaluations. You're often juggling multiple roles, working with tight budgets, and managing smaller teams where every person's impact shows up big. Here's how to make performance reviews work for your situation:

• Keep it simple but consistent. You don't need complex rating systems or lengthy forms. A straightforward template covering key areas—goals, strengths, improvement opportunities, and next steps—works better than complicated systems nobody understands.
• Focus on business impact. In small businesses, it's easier to see how individual performance affects the bottom line. Connect employee achievements to concrete business results—increased sales, better customer satisfaction, reduced waste, or improved efficiency.
• Address training needs creatively. You might not have big training budgets, but you can offer job shadowing, online courses, industry events, or mentoring relationships. Sometimes the best development happens through expanded responsibilities rather than formal training programs.
• Be honest about growth opportunities. Small businesses can't always offer traditional career ladders, but you can provide skill development, cross-training, or increased independence. Help employees understand how they can grow within your organization's reality.

Homebase tip: Track attendance patterns and performance metrics throughout the year using Homebase's time tracking and scheduling features, so you have concrete data ready for reviews.

Employee performance evaluations: legal and compliance considerations

Performance reviews aren't just helpful management tools—they're important legal documents that can protect your business or cause problems if done poorly.

Documentation requirements

Every performance evaluation should create a clear record showing you treat all employees fairly and consistently. Include specific examples of both good performance and areas needing improvement. Vague statements like “needs better attitude” won't help you if you need to justify employment decisions later.

If you opt for a letter-based, formal performance review session, have employees sign and date their performance reviews, even if they disagree with the evaluation. Their signature confirms they received the feedback, not that they accept it. If they refuse to sign, document that refusal and have a witness present.

Store all performance documentation securely and keep consistent records for all employees in similar positions. Inconsistent documentation practices can suggest discriminatory treatment and create legal problems.

Avoiding common legal mistakes

Never include comments about protected characteristics like age, race, gender, religion, or disability status in performance reviews. Focus only on job-related behaviors and outcomes. Even well-meaning comments can cause problems—avoid phrases like “despite their age” or “as a working mom.”

Don't let personal relationships affect evaluations. Whether you like someone personally shouldn't influence their professional assessment. If punctuality matters for one team member, it should matter for everyone. Different standards for different people can suggest potential discrimination.

Address performance issues promptly rather than letting them pile up until review time. Avoid ultimatums or threats during performance reviews unless you're prepared to follow through immediately. Statements like “this is your last chance” create expectations about future employment decisions that can limit your flexibility.

Frequently asked questions about employee performance reviews

What is an example of a good performance review?

A good performance review balances specific praise with constructive feedback and clear next steps. It might say: “Maria exceeded her sales goals by 15% this quarter and received excellent customer feedback. Her product knowledge helped close three difficult sales. Moving forward, she'll develop leadership skills by mentoring our newest team member.”

What should I write in my employee performance review?

Focus on specific, observable behaviors and measurable outcomes. Include concrete examples of achievements, areas for improvement backed by evidence, and clear goals for the next period. Avoid vague generalizations and personal opinions. 

What are the 5 words performance review?

Many businesses use five-point rating scales with terms like: “Outstanding,” “Exceeds Expectations,” “Meets Expectations,” “Below Expectations,” and “Unsatisfactory.” However, the specific words matter less than ensuring they're clearly defined and consistently applied across all evaluations.

What are the 5 most meaningful questions to ask in a performance review as a leader?

1. “What accomplishments are you most proud of during this period?”
2. “What challenges prevented you from reaching your goals?”
3. “What additional support or resources would help you succeed?”
4. “Where do you want to develop professionally in the coming year?”
5. “How can I be a better manager and support your growth?”

Streamline performance reviews with integrated team management

Performance reviews work best when they're part of how you manage your team day-to-day. Instead of scrambling to remember what happened months ago, you need systems that track performance throughout the year.

The businesses that get the most value from performance reviews make evaluation an ongoing process, not an annual event. When you combine structured reviews with consistent day-to-day management, you create an environment where people thrive—and your business benefits from their success.

Homebase integrates scheduling, time tracking, and team communication to make performance reviews easier. Track attendance patterns, monitor team collaboration, and document achievements throughout the year so reviews become natural conversations about growth and success.

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