Resignation before Performance Review

Without seeing the self-assessment forms and emails it's difficult to guess what went wrong. What puzzles me is that this situation seems to have blindsided you even after doing O3's since January. Did you discuss the PRs in the O3's?

It's common, almost inevitable, to have resistance when O3's start up, but that usually works through in a fairly short time frame. I can't think of a reason why a performance review itself would wag out an employee, it's pretty standard stuff.

Were the employees angry with the O3 process all along? Or was everything going swimmingly then all of a sudden things blew up? Especially since you've been doing O3's I get the sense that something's going on in the background. It's possible that one person can't stand the thought of being evaluated as an employee and wanted to scorch the earth by convinicing someone else to leave along with them, but it seems more likely that something has been brewing for a while. I'd look deeper than the performance review itself.

You said you received two resignations. Are these employees gone, or is it just a threat? If they're waiting for a reaction other than, "I wish you the best in your future, please make sure you take all your personal belongings with you when you leave," it's bullying, and your reaction will determine whether they're in control or you are. It doesn't mean you can't make an attempt to get them to reconsider if that's what you want to do, but it needs to clearly be on your terms, not theirs, or they'll threaten to quit every time the wind blows.

I'm going to read between the lines a bit and suggest you may have a "KICK ME" sign taped to your back. You're going through the right process, listening to podcasts, spending time and effort trying to improve your management skills, which are all good. But you seem to be in a mode of worrying about how it will be received when you give reasonable instructions. I sense you've fallen for some gaslighting too. They (he/she) reacted that you went anywhere near demanding your employees be on time, and you're scrambling to justify your reasons, showing them data, fearing you didn't do a good job explaining (how much explaining does someone need to understand they have to be at work on time?), or that you weren't super clear. I haven't seen anything from you that would indicate you should have anything to fear or second guess yourself, other than you're letting them walk all over you.

Have you listened to the podcasts on feedback? It's important when dealing with employees to stick to behaviors, not attitudes, athough they can be related. Attitudes can't be well defined, behaviors can. The feedback model says to define the negative behavior, explain why the behavior negatively affects the company, and to get a committment the employee will change the behavior. "When you're late to work other employees have to pick up your slack and you're creating inefficiencies in the workflow. Can you make a committment to be on time going forward?"

If an employee is simply not willing to do what you reasonably ask, like getting pissed that they have to be at work on time, the fact they're still employed by you puts the finger pointed directly at you. Not for lack of trying to coddle them, but for not putting your pen on the desk, folding your hands together, then looking them in the eye and saying, "Then why should be bother to continue this discussion?"

Were the two directs resigning not meeting expectations?  In 15 years as a manager, I had two resignations prior to the annual PR.  In both cases, I had been giving constuctive feedback when they were missing the mark and coaching to try to get them back on track. They probably knew that they were going to receive bad ratings and decided to leave beforehand.

Could this be true in your case?