It’s Time To Ditch Annual Reviews

Most employees, managers and HR professionals have a strong opinion about the annual performance review. Overwhelmingly it seems that most of us would prefer that they go away. Yet, many employers still rely on this out-dated and often inaccurate tool to measure work performance.

The annual review is time consuming and rarely ends up being the performance management tool it is supposed to be. Here are some reasons why it is time to ditch the annual review and ideas for replacing it.

Inaccurate Reviews

I one time got a call from a manager who was ready to fire an employee on the spot. He claimed that the employee regularly underperformed, was often late and was disrespectful toward coworkers. I did what most HR people would do and grabbed the employee’s file in order to look through the history of warnings and reviews. There were no warnings and all the reviews told the story of an excellent employee who did not have any problems. When I questioned the manager, he said, “Well, I didn’t want to give the employee a negative review because that might have made him ineligible for an increase.”

This story demonstrates a big risk with the review process. Whether it is concern about affecting an employee’s pay increase or fear of having to tell an employee they have many areas that need improvement, managers often struggle with using the annual review as a performance management tool. There is also a problem with inconsistencies between managers and even with reviews for employees working under the same person. Even if a manager was not trying to be discriminatory, inconsistencies may appear to be so.

The Paperwork Problem

Managing annual reviews can be a paperwork nightmare for HR. There are the notices to managers about reviews due, reminders as the deadline approaches, sending back reviews that are not quite up to snuff, sending out more reminders for late reviews and finally getting the signed review back to store in the employee’s file for all eternity. Even if your review system is mostly electronic, there is still quite a bit of paperwork flying around either virtually or in print.

Reviews also try to capture 12 months worth of work in a single document. When work and projects do not always run a 12-month course, the period covered by a review seems arbitrary. Employees would be better served with regular feedback or perhaps even a critique at the conclusion of a big project.

Performance Management As An Ongoing Process

When we make the decision to ditch the annual review, we can put our energy into making performance management an ongoing process. For HR, this means training managers on how to give effective feedback and how to document performance throughout the year rather than on an annual basis. Encourage managers to have one-on-one meetings with employees on a regular basis to help facilitate on ongoing approach to performance management.

The best time to give someone feedback is in the moment. If you have an employee who goes above and beyond with a customer, let them know that day that they have done a good job, and then note it in their file. If an employee’s communication with coworkers could use some improvement, coach them as soon as you learn about the issue and then follow up regularly.

Work performance is not a static thing that should be limited to an annual snapshot. Focusing on performance management as an ongoing process encourages managers to make a regular habit of encouraging and coaching their employees.

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