Why Annual Performance Reviews May Not Be Enough

Everyone has an opinion, especially when it comes to performance appraisals. The internet is bursting with forum and blog posts by professionals denouncing the annual performance review process, touting it as a bureaucratic and ineffective waste of time. Annual performance reviews are time consuming and can be futile if only viewed as a nuisance. But what if we looked at performance reviews as more than just an annual occurrence? Maybe instead of trying to fit our performance management process into the mold of what we think a performance program should be, why not adapt it to the needs of our organizations?

Performance management is changing because we are changing. We are a no wait society who wants to know how we measure up…now. We are also more engaged in our performance and thrive in communicative environments in which we can discuss our strengths and how we can improve. In the 2012 Employee Satisfaction and Engagement Report by SHRM two of the top five contributors to employee satisfaction were communication-related, communication between employees and senior management (57%) and relationship with immediate supervisor (54%).* And in a 2012 survey conducted by Achievers, a San Francisco consulting firm, 13% of employees said they received feedback annually compared to 24% who said they receive immediate feedback. When asked how frequently they would like to receive feedback, only 1% said they would like to receive feedback on their performance annually while an astounding 61% said they would like on-the-spot/immediate feedback.** Clearly we value communication and want feedback more frequently than employers provide.

Again, there is no one-size-fits-all model for performance management, but there can be a lot said for adding more time to discuss employee performance. One of our clients, for example, found that with feedback only being offered once a year, employees were left with information that was often outdated or irrelevant. Compounding the issue, leadership had very limited data to make promotion and compensation decisions. After adding quarterly feedback to their annual performance reviews, leaders had access to accurate, substantial, and current data to back compensation and promotion decisions while employees were provided with valuable feedback that they could use for self-improvement and setting future goals.

Instead of only relying on annual performance reviews, start filling your calendar with periodic, more informal performance discussions where employee and manager get together and provide two way positive and constructive feedback. The more frequent the feedback, the more in tune employees will be with what is expected of them, how they have contributed to the company objectives, and the more opportunities they will have to improve. Regular feedback sessions can also help managers determine what makes each employee tick, and how they can use that knowledge to help motivate their employees to reach department goals.

Don’t immediately abandon your entire performance review process; simply make it pertinent to your organization’s current needs. Evaluate what parts of the process work for you and adapt or eliminate the parts that don’t. 

We’d like to hear from you. What does your company do to make the most out of your performance review process? 

References
*http://www.shrm.org/LegalIssues/StateandLocalResources/StateandLocalStatutesandRegulations/Documents/12-0537%202012_JobSatisfaction_FNL_online.pdf 
**http://go.achievers.com/rs/iloverewards/images/WP_achieversintelligence.pd