I work for a small, established company, and we don’t have policies in place for employee reviews. Actually, we don’t really do reviews at all. I find this odd. Is there a reason a company wouldn’t ask for or provide formal feedback? If I wanted to put a procedure in place for the people I manage in my department, what would I need?

To be honest, most managers do such a horrible job of writing employee reviews that it does make some sense just to bag the whole thing. But, overall, I’m strongly in favor of employee reviews. Why? Because, in addition to writing pathetic reviews, managers also tend to give pathetic feedback. The result is that the lousy review is often the only definitive feedback employees ever receive.

There are plenty of reasons why companies don’t do performance reviews. Some companies just never started doing them, so why start now? Some companies make a conscious decision not to do them because they feel like the amount of work and anxiety involved in the process doesn’t justify the end results. Some companies feel like reviews aren’t important because managers should be giving constant feedback throughout the year. And still others don’t do reviews because they don’t want to provide employees an opportunity to ask for additional pay.

While these may be logical reasons to avoid reviews, dismissing the process can cause problems if you ever lay anyone off. It’s handy to have your employees already categorized and ranked so you can have a legally defensible reason for why you picked one person over another.

Most managers hate doing reviews, and employees don’t like them either so no one is complaining about their omission. But you? You want to do a review. This probably means you’re the type of manager who gives regular feedback to your employees anyway. A review simply formalizes that. And that’s a great thing when it’s done by a competent manager. Even though your company doesn’t do reviews, you can do them for your department, So let’s establish a procedure.

Remember that the purpose of a review isn’t just to say, “This is how you did this year,” but to plan for the future. There should be three elements included in the review.

1. An employee self-evaluation: Lots of people want to skip this phase. After all, people tend to rate themselves highly even when they don’t deserve it. But the reality is, most bosses don’t know everything employees do. You want to give your employees the chance to tell you what fabulous things they’re doing.

2. Manager evaluation of last year’s goals: In theory, you should have concrete, measurable goals for all your employees, and the review is the time to see how the employee lived up to those goals. If you haven’t done that, the evaluation can be a little difficult. Still, you should have job descriptions you can use to evaluate performance. Clearly list out each responsibility/goal and how the employee met, didn’t meet or exceeded the target. Detail is great here.

3. Goals for next year: A review is nothing more than a stressful conversation if you don’t present goals for the next year. Take care that the goals aren’t fuzzy. For instance, don’t write, “Improve processes.” Instead, write out precisely what those improved processes would look like. Is it to reduce by 20 percent the time it takes to process new orders? Is it to reduce by two the number of people needed to carry out your program? And what is acceptable? A 1-percent improvement? 10 percent? By when? Figure that out, and write it clearly.

4. When you have these three pieces, sit down with each employee and go over it. Get their feedback. Adjust their goals if necessary. Give the employee a copy and keep a copy for yourself. Since it isn’t a company-sponsored thing, you can ask HR if they want to include a copy in the employee’s personnel file. They may, and they may not.

Then, as you go throughout the year, meet regularly with each employee and go over their goals. This way, your employees always know where they stand and how they are doing. It reduces the mystery and means that next year’s evaluation will be easy to write and there won’t be any surprises for your employees.

Your company doesn’t need to have a formal process in order for you to have a structured department with documented performance reviews. It’s not only good for the employees to know where they stand, it’s good for you to know how your employees are doing. The review forces you to look at what’s really going on, and that’s great management.