Great managers know that conducting employee evaluations on a regular basis is critical to the success of their business and the growth of their employees.

Semiannual or annual performance reviews give managers an opportunity to praise employees for what they have accomplished and also lay out specific goals/objectives on how they can improve in the future. Most importantly, it allows managers to discuss the long-term vision for the company and how each employee will fit in to that growth strategy.

However, many businesses underestimate the power of an effective employee evaluation and treat it as if it’s a chore. While an employee, on the other hand, may view employee evaluations as “critical moments” in their career – moments that help to set either a positive or negative outlook on their future role within the company.

This is something that a manager needs to take into consideration. If you’ve delayed on employee evaluations or are not sure how to effectively implement them into your business culture, we have a handy guide for you on where to start.

Here’s how to conduct an effective employee evaluation.

1. Set a Specific Purpose for the Meeting

Go beyond the common “objective review” where you simply point out positive and negative aspects about the previous year. Instead, ask yourself:

“What do I want this employee to leave with?”

For example, you might discuss a role change within the company that will help the employee reach a new career level. Or, you might discuss with them the opportunity to learn a new skill or set of skills.

Whatever purpose, theme, or objective you choose for the review, ensure that you’ve planned for it going in and that you stick to it throughout.

2. Communicate Directly and Openly

It’s no secret that no one truly enjoys performance reviews – the employer or the employee. Which is exactly why managers often try to avoid confrontation and stick to inflated positive comments.

Don’t let it happen to your evaluation. It may seem like a no-brainer, but be as honest as possible with an employee about his or her performance. It may be slightly uncomfortable, but it’s the only true way that both parties will benefit.

Focus on the specific issues at hand and don’t point the finger of blame. Keep the conversation open-ended and allow the employee to respond to any feedback that you give. They may have a legitimate explanation or reason for their performance.

3. Focus on the Future

Employee evaluations serve two major purposes – to review past performance and to set the direction for the employee’s future. The second purpose is far more important than the first and should purpose should take the majority of the time.

Discussing ideas for development and developing a plan of action is a great way to let the employee know that they have done a good job and that you’d like them to continue on a successful path.

Openly chat about what the employee’s plans and goals are for the future and discover if they are in alignment with the company’s plans and goals. If they are not, that’s a great place to start on where you may both find common ground.

4. Come to an Agreement

The most effective employee evaluations always end with an understanding between the employer and the employee on what the specific plan of action is for the future.

This portion of the meeting can be open conversation as well, but it is ultimately the manager’s responsibility to ensure that everyone is on the same page. Whether it’s a specific set of goals, a new role, a skill development plan, or all of the above, each person should leave the meeting with items on their to-do list.

5. Try to End on a High Note

Last, but not least, keep in mind that employee evaluations do not have to be a serious, dreadful interaction between a manager and an employee.

They can be light-hearted and effective all at the same time.

A great way to do this is to make sure that you end the evaluation on a high note. Summarize the key discussion points, thank them for their time and engagement, and reassure the employee of your ongoing support in their career.

You may even consider asking employees to take an anonymous survey when evaluations have finished. This will give them a chance to express their thoughts and feelings and will help provide ways in which you can improve as a manager.

Although employee evaluations aren’t necessarily something that employers and employees look forward to, they are a great opportunity to have candid conversations about past performance and future goals.

It all comes down to your perspective about evaluations as a manager and how they are implemented within the culture of your company.

Ultimately, they are a way to build one-on-one relationships with your employees while considering the needs and long-term success of your business.