Annual performance reviews “have developed a bad reputation as bureaucratic exercises, with some organizations eliminating formal year-end performance ratings altogether” – but they can play an important role in motivating and retaining top employees if used properly, according to a report done for the National Academy of Public Administration.

The report summarized views expressed at a NAPA event late in 2016, at which panelists agreed that performance reviews “should be part of a broader continuing effort to communicate goals and expectations and to provide feedback on performance to employees. This should include more frequent reviews and other mechanisms for engaging employees throughout the year.”

In contrast, poor morale and performance can result if management “fails to adequately communicate to employees how their work contributes to organizational goals and objectives,” it said.

Some key takeaways from the experts, it said, include: that it is important to have clear metrics to assess performance; that managers and employees both must be willing to give and accept feedback; as circumstances change, management should identify opportunities for improvement and adjust the approach; and performance management should emphasize continuous communication and feedback as part of day to day management.