5 Mistakes That Spoil Your Annual Review Before the 2027 Pay Round

Table of contents

1. An annual review under pressure in 2027
2. Mistake 1: mixing evaluation and pay negotiation
3. Mistake 2: turning up unprepared
4. Mistake 3: judging the person instead of the facts
5. Mistake 4: setting vague or unrealistic objectives
6. Mistake 5: filing the summary away in a drawer
7. Conclusion
8. FAQ

Every year-end, the same ritual returns. The manager blocks an hour in the diary, digs out last year’s form and hopes the annual review will go smoothly. The employee, meanwhile, arrives with a single question in mind: “What about my salary?”

This year, that question weighs more heavily. Swiss companies are planning modest raises for 2027, while unions are demanding more. The annual review is therefore caught between two expectations that do not meet.

Yet a well-run performance review remains a rare moment. Manager and employee genuinely take the time to talk. Poorly prepared, however, it leaves a frustration that lasts all year. The five mistakes below are the most common ones, and a little method is enough to fix each of them.

An annual review under pressure in 2027

The pay round figures set the tone. According to the KOF wage survey published in August 2026, Swiss private companies expect an average nominal increase of 1.2% over the next twelve months. The median stays at 1%, and half of the companies plan between 0.6% and 1.4%.

Clear differences between sectors

Behind this average, the gaps remain clear. Construction plans 2.0%, the only sector above last year. By contrast, retail expects 0.8%, and banks drop from 1.4% to 0.8%. In addition, companies expect inflation of 1.1%, which would leave real wages almost flat.

Unions and employers far apart

Faced with these forecasts, Travail.Suisse is calling for a general 2% raise for 2027 (source in French). The Swiss Employers’ Association, for its part, considers an average raise of 1% plausible. The union federation also estimates that the purchasing power of average incomes fell by 1.5% to 1.9% between 2022 and the end of 2026. Health insurance premiums are one of the main causes.

In practice, many employees will therefore come to their review with an expectation the budget cannot cover. That is exactly where mistakes become expensive.

Is the annual review mandatory in Switzerland?

A legal point is also worth making. Contrary to a widespread belief, the Swiss Code of Obligations does not require an annual review (source in French). Some collective labour agreements do provide for it, however. The employer’s duty of care also leads many companies to hold one. So check your collective agreement and internal rules before treating it as optional.

Mistake 1: mixing evaluation and pay negotiation

This is the most common mistake, and the most costly one in 2027. Once salary enters the conversation, everything else disappears. The employee stops listening to the review of their year, because they are waiting for the number. The manager, on the other hand, becomes defensive, especially if they know the budget is tight.

Separate the two conversations

The solution is to clearly separate the two topics. First, the annual review is there to take stock of the year, recognise successes and prepare what comes next. Then the pay discussion can take place at a later stage. It follows its own criteria: the overall budget, the internal pay scale and the position of the role.

If your company still links the two, say so from the start. For example, explain how the evaluation influences the decision and when you will announce it. A clear framework is better than a taboo subject that poisons the whole hour.

Do not promise what the budget cannot deliver

Finally, avoid vague phrases such as “we’ll see what we can do”. With raises of around 1%, they create an expectation that quickly turns into disappointment. It is better to say honestly what is possible. Then talk about the other levers: training, new responsibilities, flexibility or a change of role.

Mistake 2: turning up unprepared

An improvised review is easy to spot. The manager searches for concrete examples, the employee discovers the form during the meeting, and the conversation stays on the surface. Yet the quality of the review is decided mainly beforehand.

On the manager’s side

To prepare, first go back over last year’s objectives and the key events of the year. Next, note two or three specific successes, then one or two areas for improvement. Also plan the questions you will ask: they matter as much as the messages you want to get across.

On the employee’s side

The employee should also prepare for their annual review. Self-assessment is the simplest tool for this. It means filling in the same form as the manager, with their own examples. That way, the conversation starts from two perspectives, not from a verdict.

Send the form at least a week before the meeting. An employee who has had time to think arrives calmer and more constructive. Conversely, a last-minute invitation feels like an administrative exercise.

Mistake 3: judging the person instead of the facts

“You lack commitment.” This sentence, heard in many reviews, gives no lead for improvement. It targets the person, not an observable behaviour. As a result, it almost always triggers a defensive reaction.

The biases that distort evaluation

Several classic biases distort a manager’s judgement:

• Recency bias: the last three months outweigh the first nine, for better or worse;
• The halo effect: one great quality, or one big flaw, colours the whole evaluation;
• Central tendency: everyone gets “meets expectations” for fear of conflict;
• Similarity bias: we judge people who resemble us more favourably.

Describe, then ask

To avoid these traps, rely on dated facts. For example: “On the September project, the report was three days late.” Then ask the employee how they see the situation. Often, they explain a context you were unaware of.

Recognising successes matters just as much. A specific “thank you” that mentions a concrete action has more impact than a general compliment. Our article on feedback culture explains this approach in day-to-day work.

Mistake 4: setting vague or unrealistic objectives

An objective such as “improve communication with customers” sounds reasonable. However, nobody will be able to say next December whether the team has achieved it. The next annual review will then turn into a debate of opinions.

Few objectives, but measurable ones

A good annual objective is specific, measurable and time-bound. It also depends largely on the person who owns it. In practice, three to five objectives are enough: beyond that, priorities get diluted. Here are a few simple guidelines:

• a results objective linked to the main purpose of the role;
• a development objective on a skill identified during the review;
• a team objective, if the team shares a common challenge;
• for each one, an indicator and a date for an interim check-in.

Negotiate, do not impose

An imposed objective creates little commitment. In contrast, an objective that is discussed, then reworded with the employee, becomes their own. So take the time to check that it is achievable with the resources available. In 2027, with tight budgets, an unrealistic objective demotivates faster than it mobilises.

Mistake 5: filing the summary away in a drawer

The last trap comes after the review. Everyone signs the summary, files it, then forgets it until the following year. The employee concludes that the exercise was mainly administrative.

Turn the review into an action plan

A successful review leads to a concrete action plan. It sets out the objectives, the planned training or support, and the dates of the next check-ins. After that, two or three follow-up meetings during the year are enough to adjust course. That way, no surprise spoils the year-end review.

Keep a useful record

The written record also has practical value. Under Swiss law, an employee may request a work certificate at any time (source in French). It covers in particular the quality of their work and their conduct (art. 330a CO). Factual summaries, kept year after year, therefore make it easier to write when the time comes.

Running an annual review is a skill you can learn. Active listening, constructive criticism, recognising effort, building evaluation tools: these skills are best practised through role-play. That is the principle of our Successful annual reviews course. It takes one day, in Geneva, in Lausanne or in a virtual classroom.

Conclusion

In 2027, the annual review will take place in a tense pay context. All the more reason not to reduce it to a negotiation. Separate the evaluation from the pay discussion and prepare on both sides. Talk about facts rather than character traits, set few but measurable objectives, then follow them up during the year.

When it is well run, the review becomes a management tool in its own right. It clarifies expectations, builds trust and gives employees reasons to get involved, even when the pay budget is modest. Find more resources in our Soft Skills catalogue.

FAQ

Is the annual review mandatory in Switzerland?
No, the Code of Obligations does not require it as such. However, a collective labour agreement or internal rules may provide for it. It remains a widely recommended practice.

How should an employee prepare for their annual review?
Reread last year’s objectives, list your successes with specific examples and fill in the self-assessment form. Also note your training needs and career wishes.

Can you discuss a raise during the annual review?
Yes, if the company allows it, but it is better to separate the two conversations. The evaluation covers the past year, whereas the pay decision also depends on the budget and internal policy.

How long should a performance review last?
Generally allow between one hour and an hour and a half. This gives enough time to take stock, exchange views and set objectives without rushing.

What if you disagree with the evaluation?
The employee can have their point of view recorded in the summary. A discussion with HR or a second meeting then often helps to clarify the facts.