To make the most of performance reviews, allow ample time for discussion—after all, you are talking to a person about the job he or she does every day and your opinion of the quality of that work. This is a meaningful process to staff and often one of the few times they get your undivided attention.

When going over performance reviews with staff, ask them for feedback about your performance—ask them whether you meet their needs. Also, ask staff for at least one suggestion regarding performance improvement on the unit. By doing this, you can give them a safe outlet for expressing any concerns they may have. Be sure to allow time to review last year's goals and, later, work on the new goals together.

From a financial perspective, annual performance reviews may lead to increased salaries, as many hospitals base staff raises on performance. Other organizations may base raises on years of service or the staff's level of clinical expertise. Either way, every hospital allots a certain amount each year for salary increases. Find out what salary percentages your hospital is offering its staff, as the amount may change from year to year.

—KT Waxman, MBA, RN