How to Run a Performance Review This Year, and a Better One Next

It is late May. The email from HR has landed in your inbox. Performance reviews open in three weeks, please block out time to attend the manager training on Thursday at 2pm. You've sat through this training four years running. The slides have changed font. The advice hasn't.

You have a stack of reviews to prepare. One is a high performer who is hard to work with. One is a quiet underperformer who has been coasting since February. The third is fine, but you have not paid enough attention to know what to say.

Your bonus recommendations are due the same week the reviews are.

If you are typing "how do I run a performance review" into a search bar right now, you are in good company. End-of-financial-year reviews land in June for most Australian businesses, and they almost always carry a bonus conversation alongside them. The pressure is real, and it is not the pressure HR talks about in the training. The pressure is calibration. You have a finite bonus pool, ratings to defend in calibration meetings, and people whose numbers you need to make work. Underneath all of it, you also want this conversation to develop the person sitting across from you.

This piece is in two halves. The first half helps you survive the review you have to run in June. The second half is the bigger argument: the only way to make next June feel different is to start coaching properly from July. The review is the receipt for a year of coaching which should have already happened. If the coaching was there, the review writes itself. If it wasn't, no clever review structure will rescue what didn't happen.

Why the Review Feels Contrived

The contrived feeling is not in the meeting. It starts in the prep.

Notice what happens in the weeks before. You scroll back through your inbox looking for examples of what this person did. They do the same thing from the other side, hunting for proof of achievements against criteria written by someone in HR who has never met them. One of you, often both of you, drops the half-remembered examples into AI and asks it to turn them into something which sounds substantial. The form gets filled. The rating gets justified against the framework. The conversation which follows feels exactly as contrived as the preparation was.

This is not anyone's fault, exactly. The form needs filling. The rating needs evidencing. The HR system needs feeding. But the entire exercise has become a proving stage. You are not preparing to have a conversation. You are preparing to defend a number, with reconstructed evidence, against a rubric written by people who were not in the room when any of the work happened. The meeting then plays out the proving stage in real time. You present the case. They accept or push back on the case. The form gets signed. Nobody, on either side of the table, was there to think.

The contrived feeling comes from the gap between what the meeting claims to be and what it really is. It claims to be a meaningful annual conversation about a person's year. It is, in practice, a compliance exercise dressed up as one. Once you see the gap, the prep makes sense, the meeting makes sense, and so does the relief when it is over.

Part One: Surviving the Review You Have to Run Now

The review on your calendar in June is the review you have. You may not have coached this person consistently for the past twelve months. Few leaders did. You have to make the meeting count anyway.

The next few sections walk through the meeting in order: how to prep without faking it, how to open, how to handle the rating, how to handle the reaction, how to close, and what to do once you walk out.

Prep without faking it

Forget the inbox-trawl. The form needs filling, but it does not need to be filled with reconstructed proof of every quarter. Before anything else, settle what kind of meeting this is.

Some companies finalise the rating before the leader meets with the staff member. Others run the first meeting as input-gathering, with the staff member presenting their case before calibration happens. Know which one you are running. Then prep accordingly.

If the rating is settled before the meeting:

• Know your case. Your number, the calibration story behind it, where you would push back if challenged. Walk in with two or three specific behavioural moments which illustrate the rating. Recent if possible. "The way you handled the supplier escalation in April" lands harder than "your stakeholder management has been strong this year." If the rating is still wobbling in your head, the uncertainty will leak in the room and the meeting will spiral into a negotiation it was never meant to be.
• Anticipate their reaction. You know this person. You know whether they shut down, push back, get tearful, or go quiet. Plan for the most likely response. Decide in advance what you will do if it happens.

If the rating is still open and the meeting is for input:

• Hold your view lightly. You should walk in with a working sense of where you would land. You should not walk in committed to it. The point of this meeting is to test your view against theirs and to surface anything you have missed before calibration.
• Decide in advance which moments you are uncertain about, and ask them. "Walk me through the supplier escalation in April. I want to make sure I have understood it the way you experienced it."

Open the meeting cleanly

How you open depends on which kind of meeting you are running.

If the rating is settled, lead with it. Get the rating and the bonus number on the table inside the first five minutes. There is a reason for this. The threat of a lower bonus dominates working memory in a way development feedback never will. Until you have answered the question they walked in with, the rest of what you say is competing with the calculation running in their head. The longer you make them wait, the less of the meeting they will absorb.

The opening is short and direct. "Before we get into anything else, I want to give you the headline. Your rating for the year is X. Your bonus is Y. Let me walk you through how I got there, and then I want to hear from you." Thirty seconds. The number is on the table. The conversation now has somewhere to go.

If the rating is still open, name the stage at the start instead. "I want to be upfront. The rating is not settled. This conversation feeds into the calibration. I would like to hear what you would put forward, and I will share my own working view, before I go into calibration with the leadership team." This sets the meeting up as the input-gathering exercise it really is, and stops the staff member sitting through the conversation guessing at a number you have not landed on.

Explain the calibration honestly

People accept hard ratings when they understand the process behind them. They do not accept ratings which feel arbitrary, even when those ratings are generous.

Walk them through it. "Here is what the calibration looked like across the team. Here are the moments which drove your rating up. Here are the moments which kept it where it is rather than higher. Here is what the rest of the team needed to look like for the bonus pool to land where it did." You are not asking for permission. You are showing them the process. Most people respect the honesty even when they disagree with the outcome.

Handle the reaction in the room

The reaction is rarely the one you planned for. The high performer who you thought would be pleased is upset because the rating was not higher. The underperformer who you thought would push back accepts it without a word. The quiet one cries.

What works:

• Slow down. Stop talking. The instinct when someone reacts is to fill the silence with reassurance or justification. Do not. Let them feel what they feel for a moment. Thirty seconds of silence is uncomfortable for you. It is necessary for them.
• Acknowledge before you defend. "It looks like this isn't what you were hoping for." "I hear you disagree with this." Naming what is happening in the room takes the temperature down. Jumping straight into your justification escalates it.
• Take pushback seriously. Hear the case. Ask questions about it. You do not have to change the number. You do have to make the person feel heard. Often the pushback is not really about the number at all. It is about feeling unseen across the year, and the rating is the proxy for raising it.
• Do not capitulate to make yourself feel better. If the rating is right, the rating is right. Softening it under pressure undermines next year's calibration and trains the person to push back harder next time.
• Know when to pause. If the person is genuinely distressed or losing composure, offer to take a break. "Let's stop for ten minutes and come back to this." A meeting which restarts after a pause is almost always better than one which barrels through.

Name the meeting and close it

Before you wrap up, name what the meeting is and what it is not. "This conversation has been about closing out the year. It is not the conversation about what is next for you. We are going to do the next one separately, and properly, in July." This sentence changes the temperature in the last ten minutes. It also makes a promise you now have to keep.

Then close cleanly. Confirm the rating, confirm the bonus, confirm the date of the July conversation. End on time. Do not improvise the development talk. If you have not done the coaching across the year, you do not have anything credible to say about what is next for them inside this meeting. Pretending you do makes it worse. Acknowledge the gap. Commit to fixing it.

After the meeting

Two practical things. Send the rating and bonus in writing within 24 hours. Memory rewrites itself fast under emotional load and the version they walk away with is rarely the version you delivered. Putting it in writing protects both of you. Then book the July conversation in their calendar before the end of the day. Not "let's find a time." A specific date, a specific length, a specific agenda. The meeting which gets booked happens. The meeting which gets scheduled later does not.

Part Two: How to Make Next June Different

The review is the proving exercise. It is not where development happens. Development happens in the eleven months between this June and the next, in the conversations you already have with the people you already see every week. If those conversations are real, next June stops feeling like a performance. The rating is a confirmation of work you have already discussed. The bonus number is the easiest part of the discussion.

This is not a new tool, a new template, or a new HR system. It is a different default in your one-to-ones. The structure Catalyst Enablement uses with leaders to build the new default is called CORE.

CORE: The Coaching Default

CORE stands for Context, Observation, Response, Evolve. It is a coaching sequence built on four operating assumptions about the person sitting across from you.

• Context: They were there. You were not. Start from their version of events.
• Observation: They are capable of handling feedback on how they are perceived. Do not protect them from it.
• Response: What they did is not who they are. Separate the behaviour from the person.
• Evolve: They are capable of changing what they do next. Your job is to make the commitment specific.

If you do not believe these four things about the person you are coaching, the framework becomes a script. The assumptions come first. The steps come second.

You do not need to run a full CORE conversation every week. You need it to become the shape of how you give feedback, how you debrief a project, how you talk about a stakeholder relationship which is wobbling. Used regularly, it builds a track record of behavioural conversations which means the June review is the easiest meeting of your year.

Step 1: Context

Most coaching conversations go wrong inside the first five minutes. The leader opens with their summary, anchors the conversation in their own version, and the employee spends the next thirty minutes responding to a frame they did not set. Reverse it. Start with theirs.

Open with: "Walk me through it. What stands out?" Listen for what they remember, what they prioritise, and what they leave out. The omissions matter as much as the inclusions. Build a shared map before you bring your own observations into the room. People defend less when they have been heard first.

Step 2: Observation

This is where perception enters the conversation. Output is what the person delivered. Perception is how they were experienced delivering it. Both shape how they are seen, how they get promoted, and how their reputation builds. The output is on the project plan. The perception is the thing leaders almost never put on the table.

The opening question for this step does the most work in the entire conversation: "If you step into the shoes of the people you worked with on this, what do they see?"

Most people answer this badly the first time. They give you intent ("I think they see someone who really cares about quality") rather than impact ("they see someone who is hard to please"). When they answer with intent, ask the follow-up: "Set aside what you meant to communicate. What do you think they experienced?"

Stay in this step longer than feels comfortable. Perception conversations carry emotional weight. Rushing past them is what turns the framework into a checklist.

Step 3: Response

This is the behaviour step. The shift is from "this is who you are" to "this is what you did."

Coaching conversations tip into identity statements faster than almost any other workplace conversation. "You are not collaborative." "You are not strategic." These statements are useless. They tell the person who they are, not what they did, and they leave nowhere to go. They also trigger defensiveness: identity feedback activates the same threat response as personal criticism, regardless of intent.

Behaviour statements do the opposite. "In the planning session last Tuesday, you cut three people off when they raised concerns." "You delivered the proposal four days late and did not flag the slip until the morning it was due." Behaviour is specific, observable, and within the person's agency. They chose it. Next time, they have the option to choose differently.

Ask: "What would your team say is the number one thing you should do differently in the next 90 days?" You will get a sharper answer than to almost any other question.

The person being coached does the thinking. The coach holds the structure.

Step 4: Evolve

The final step is commitment. This is where most coaching conversations collapse into a generic line about being more visible, more strategic, or more present in meetings. None of those mean anything.

The opening question: "What is one thing you want to carry forward, and one thing you want to let go of?" Push for specificity. Not "I will be more present in meetings." Instead: "I will pause for three seconds before responding to a challenge in the Monday standup, starting next week." Not "I will collaborate better." Instead: "I will run the next stakeholder workshop with Sarah co-facilitating, before the end of the month."

Ask them to rate themselves 1 to 10 on where they are right now in the area you have been discussing. Then ask: "What would one point higher look like?" Write down both numbers. You will return to them at your next one-to-one.

The Return Loop: What Makes It Stick

A coaching conversation which lives only in the meeting is a coaching conversation which has already failed.

The mechanic is simple. Within forty-eight hours of the conversation, the person revisits their commitment. Did they follow through on anything yet? What got in the way? What do they want to adjust?

Then the next conversation. Three weeks out. Not three months. The opening line is not "how are things going." It is: "Last time you committed to X. Take me into a moment where it showed up." This is the return loop. It builds continuity across conversations and it is the difference between leaders whose people grow and leaders whose people get reviewed.

Over multiple loops across the year, the person builds a track record of self-observation and behavioural adjustment. By the time June rolls around, you have a folder of specific behavioural conversations to draw on, the person already knows where they are strong and where they are not, and the review meeting is a confirmation rather than a revelation.

The Hard People: How Coaching Across the Year Changes the Review

Most leaders Googling "how do I run a performance review" are really Googling "how do I handle this specific person." Three patterns come up most often. Each one is harder if the coaching has not been happening, and dramatically easier if it has.

The High Performer Who Is Hard to Work With

The numbers are excellent. The stakeholders quietly avoid them. Last year you gave them a strong rating because of the numbers. This year they are about to be promoted into a role where the relationship problems will become a leadership problem.

If you have not been coaching them, the June review is the worst possible place to raise the perception issue for the first time. They will hear it as out of left field, attached to the rating, and politically motivated. If you have been coaching them, the conversation in June is a continuation of the one you have been having all year. "We've been talking since September about how the planning workshops have been landing." It is not a surprise. It is the next loop.

The CORE move with this person, run regularly across the year: stay in Observation. Use the perception question. Get specific in Response. Make the Evolve commitment behavioural and small.

The Underperformer Who Does Not See It

The output has been below the line for two quarters. When you raise it in the review, they look genuinely surprised.

If you have not been coaching them, the surprise is real, and it is also your fault. They did not know because nobody told them. The June review is now doing the work the previous six months should have done. If you have been coaching them, the rating in June is the third or fourth time you have had a version of the conversation. They are not surprised. They might disagree. They are not blindsided.

The CORE move with this person, run regularly across the year: bring data in Observation. Get the behaviour question on the table in Response. Make the Evolve commitment measurable and time-bound. Book the return loop in three weeks. The pattern of regular, evidence-based conversations stops this person being shocked in June.

The Person Who Has Checked Out

They used to be engaged. They are now quiet. Their work is fine. Their energy is gone.

If you have not been coaching them, you missed it. The disengagement happened months ago and you noticed it last week. The review is now too late to do anything other than acknowledge what is already in motion. If you have been coaching them, you saw the shift in real time. You asked the right question early: "How has this been for you?" By June, you have either re-engaged them or had the candid conversation about whether the role still fits.

The CORE move with this person, run regularly across the year: ask the real question early. Notice the energy shift before the work shifts. Make space to talk about meaning and fit. Be willing for the Evolve step to be about something other than performance improvement.

What Good Looks Like Twelve Months From Now

Imagine you commit to this from July. What does next June look like?

The form will still need filling. The "what" still has to be evidenced: deliverables, projects shipped, numbers hit, milestones reached. None of it goes away. What changes is the "how", and you have been tracking it all year. The achievements you would have spent the prep weeks reconstructing from your inbox are already documented. The behaviours behind the achievements are already on the table because you have been talking about them since July.

• You have a folder of notes from real coaching conversations, run roughly monthly with each direct report, structured loosely around CORE. Each one captures what they did and how they did it.
• You have used the return loop. Each conversation builds on the last. Behaviour change has been visible because you have been looking for it.
• The form gets filled in an hour rather than a weekend, because the evidence is already in your notes.
• The June review takes 45 minutes, not 90. The rating is not a surprise. The bonus number is not a fight. Nothing in the conversation lands for the first time.

This is what coaching across the year buys you. Not a better review meeting. A review meeting which barely matters, because the work has been done elsewhere. And a more developed, more engaged person sitting across from you.

The Catalyst Take

The performance review is one of the most consistently squandered conversations in working life, and the reason is simple. It is asked to be a meaningful annual conversation when it is, by design, a proving exercise. The form, the rating, the calibration, the bonus. None of those are going away, and none of them should. What is missing is everything else. The work of helping a person grow does not happen in the proving exercise. It happens in the eleven months between proving exercises.

Run the review you have to run in June cleanly. Honest about the rating, honest about the calibration, honest about the bonus. Then commit to the work which develops people. CORE gives you the structure for the coaching conversations across the year. Done well, by the time the next review comes around, the proving exercise still has to happen, but it is no longer the only conversation either of you remember from the year.

If you are sitting at your desk in late May with the HR email open and a stack of reviews to prepare, the review you are about to run is what it is. The one you run next June is the one to change. Block the time in your one-to-ones from July. Pick one person to start with. Run a CORE conversation in your next monthly catch-up. Set a return loop. By the time the email from HR lands next year, you will be reading a different blog.

To talk to us about embedding CORE coaching across your leadership team ahead of next financial year, get in touch here.

Sources:

• Internal Catalyst frameworks: the CORE coaching sequence.