Employees and managers alike complain about the annual performance review process being a tedious, biased, ineffective morale-buster. A 2007 study of 2, 200 employees by Salary.com found that more than 60% of workers say reviews don’t do anything to help their future performance. Nearly eight in ten companies conduct performance appraisals, and of those, 72% report being only somewhat satisfied, not very satisfied or extremely dissatisfied with the process, according to a 2006 SuccessFactors study of 1,000 HR professionals. So why have a performance appraisal system in place when everyone is so unhappy with them?

What do you do when an employee disagrees with something you’ve written on their performance review? Here are five tips to help you prepare for potential disagreements during performance reviews and how to deal with them effectively.

Business leaders and managers should be developing a strategy about how they will lead and retain employees who are impacted by the economic changes of the past year. Following are tips for managing in this “new economy”:

1. Put problem people in perspective. Don’t take their antics personally.
2. Go somewhere to cool off. You can’t concentrate on constructive, creative alternatives while you’re clinging to anger.
3. Learn to respond as well as listen. Be assertive. Don’t expect an employee to read your mind. Let him or her know when you’re annoyed, upset or disappointed.