This week a coaching client of mine told me about her end of year performance review.

She’d had a tough year. She’d been moved to another team, and then, within 2 weeks of joining that team, she was told she was at risk of redundancy.

Nevertheless, she battled on and survived the cut and, as her year-end review approached, she felt she was in a good place.

She had received some positive feedback from colleagues and stakeholders and then she got one single piece of feedback from a peer that was negative. It knocked her off balance, especially when, in the review meeting with her manager, all he focused on was this single piece of negative feedback.

When I spoke to her, she was angry, sad, disillusioned and feeling very hard done by.

If you are conducting the year end reviews of your team, please don’t make the same mistake as this manager.

This was a classic example of why most year-end reviews are counter-productive and how most people approach performance feedback in entirely the wrong way.

Here's what decades of research tells us: performance appraisals almost always fail (Murphy, 2020), because the entire concept of regularly evaluating people’s performance and pointing out their shortcomings is fundamentally flawed.

When researchers Kluger and DeNisi (1996) reviewed 131 studies on performance feedback, they found that in more than one-third of cases, feedback decreased performance rather than improved it. In another third of studies, feedback had no discernible effect at all. Only about a third of the time did feedback lead to the improvements hoped for.

The traditional approach seems logical: identify where someone is falling short, tell them about it, and they'll be motivated to improve. But several things go wrong with this reasoning.

Is this really the experience you want to create?

There's a better way, backed by equally robust research. Instead of fixating on what's wrong, focus on what's right.

The strengths-based approach involves three key steps:

This isn't about avoiding difficult conversations or pretending problems don't exist. It's about honouring a fundamental truth: people have the greatest potential for growth in areas where they already show capability.

The research backing this approach is compelling.

Strengths-based feedback enhances wellbeing and engagement, increases the desire to improve productivity, and heightens actual productivity (Clifton & Harter, 2003). It also increases job satisfaction, perceptions of fairness, motivation to improve performance (Seligman & Csikszentmihalyi, 2000). Strengths-based feedback also boosts employee engagement, which is negatively related to staff turnover and positively related to business-unit performance (Clifton & Harter, 2003).

So, when you focus on strengths, you're not just making people feel better; you're driving real business results.

How to conduct a strengths-based appraisal

1.        Start by asking your team member what's working. This immediately sets a constructive tone and makes them less defensive about any areas for improvement you need to discuss later.

2.        Be specific about what you've observed: praise vs feedback. Don't say "great job". That is just praise and does not server learning. Say "I've noticed how you handle difficult customer conversations by staying calm and asking open questions to understand their concerns. That approach has led to three complaints being resolved this month without escalation, which improves our reputation and saves resources." This works because it highlights specific actions and their impact. 

3.        Use this formula for effective positive feedback:

4.        When you do need to address weaknesses, focus on knowledge and skills rather than talents. Knowledge and skills can be learned and improved; talents are typically inherent to the individual (Aguinis et al., 2012). If someone struggles with a task that requires talents they lack, consider whether you can redesign their role, partner them with someone who has complementary strengths, or help them find ways to compensate using their strongest talents.

5.        Connect performance to consequences at multiple levels. Explain how someone's behaviours and results impact not just their own rewards, but also their team, unit and organisation. This helps people understand why their strengths matter and motivates them to use those strengths even more effectively.

6. Follow up. Create a development plan focused on leveraging strengths, and schedule a check-in to discuss progress. This shows you take the conversation seriously and genuinely want to support their development.

Performance appraisals don't have to be dreaded encounters that leave everyone feeling worse. When you shift from judging weaknesses to developing strengths, you create conversations that energise rather than deflate, that build confidence rather than breed cynicism, and that actually improve performance rather than undermining it.

Your team members don't need you to tell them everything they're doing wrong (unless these are critical failings). They need you to help them understand what they're doing right and how to do more of it. That's the kind of leadership that creates teams that people actually want to work for.

References

Adler, S., Campion, M., Colquitt, A., Grubb, A., Murphy, K.R., Ollander-Krane, R. & Pulakos, E.D. (2016). Getting rid of performance ratings: Genius or folly. Industrial and Organizational Psychology: Perspectives on Science and Practice, 9, 219-252.

Aguinis, H., Gottfredson, R.K. & Joo, H. (2012). Delivering effective performance feedback: The strengths-based approach. Business Horizons, 55, 105-111.

Burke, R.J., Weitzel, W. & Weir, T. (1978). Characteristics of effective employee performance review and development interviews. Personnel Psychology, 31(4), 903-919.

Clifton, D.O. & Harter, J.K. (2003). Investing in strengths. In K.S. Cameron, J.E. Dutton & R.E. Quinn (Eds.), Positive organizational scholarship: Foundations of a new discipline (pp. 111-121). San Francisco: Berrett-Koehler.

Gardner, W.L. & Schermerhorn, J.R. Jr. (2004). Harris Organizational Dynamics, 33(3), 270-281.

Jawahar, I. M. (2010). The mediating role of appraisal feedback reactions on the relationship between rater feedback-related behaviors and ratee performance. Group & Organization Management, 35(4), 494-526.

Kluger, A.N. & DeNisi, A.S. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. Psychological Bulletin, 119(2), 254-284.

Murphy, K. R. (2020). Performance evaluation will not die, but it should. Human Resource Management Journal, 30(1), 13-31.

Seligman, M.E.P. & Csikszentmihalyi, M. (2000). Positive psychology: An introduction. American Psychologist, 55(1), 5-14.

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