Rethinking the Annual Performance Review

The annual performance review is probably one of the most hated of all business practices. One study highlighted in Fast Company reported that 69% of all millennials (who comprise the largest segment of the work force) think performance reviews are drastically flawed. Many stated that their experience with performance evaluations had a negative impact on them and caused a range of negative emotions, from anger and frustration to anxiety and sadness. And those who have to deliver performance evaluations do not enjoy the process either. In her article, Delivering an Effective Performance Review, Rebecca Knight states that performance reviews are the most stressful of all workplace conversations for managers.

At a recent presentation I gave on how to give feedback, I briefly talked about my perspective on the annual performance review. During the question and answer period that followed my presentation, there was a general consensus that the process is time-consuming and not very useful for actually improving performance.

At ACHIEVE, we believe that the objective of performance management is to align the actions of the employee with the strategic goals of the organization. If we are going to positively influence performance, we need a system that focuses on continuous employee improvement. It is an ongoing process that requires many small steps throughout the year – not just an annual review.

The objective of performance management is to align the actions of the employee with the strategic goals of the organization.

Many organizations recognize that they need to revamp their system of performance management but are unsure of what should take its place. Organizations that do abandon annual reviews entirely but don’t offer a replacement often find it doesn’t solve any problems regarding performance management. This leads us to the question: What’s a better alternative to the annual performance review?

Four Ways to Improve Your Performance Management System

1. Schedule frequent check-ins and provide regular feedback. This sounds simple, but it’s not. It requires commitment and skill on the part of the manager, team leader, or direct supervisor. However, the payoff is worth it. We know that having regular, short check-ins and feedback allows for more responsive conversations that can actually improve performance.
2. Provide access to coaching conversations. These supportive conversations are for the purpose of building skill and capacity in a particular area and typically take place over several sessions. Coaching conversations can occur between anyone in the organization whose skills or expertise could benefit another. The person offering the coaching might be the direct supervisor, but it could also be a coworker, or even someone in another department.
3. Invite employee-initiated progress reports. Employees should be responsible and accountable for the work they complete, the projects they contribute to, and the tasks they initiate. When employees self-report, it has the dual benefit of informing their supervisor of their contribution to organizational goals while reinforcing the fact that their contribution is of value and that their voice is heard.
4. Focus on Strengths. To build capacity in our employees, we need to inspire and motivate them to be active participants in their own development. When we identify and affirm the strengths that an employee demonstrates, we show them what we value and what they should continue doing. Rather than investing time in trying to fix a deficit area, choose to put energy, resources, and time into helping people both discover and capitalize on their unique strengths and contributions to our organization.

Our goal in performance management should always be continuous improvement. But this cannot occur in a once-a-year or even intermittent review. Rather, we need to make an ongoing commitment to improving performance by using strategies like the ones listed above. These provide multiple perspectives on performance and a more well-rounded picture of actual performance than the annual evaluation. They also highlight various areas for improvement and give ongoing opportunities for development.

Organizations that focus on continuous improvement will have better business results – and this should be the goal of any performance management plan. Though these strategies take time and effort, they are well worth the extra energy.

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