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Stop the Nightmare of the Annual Performance Review Process

Yeah, it's that time of year again: the annual performance review cycle. We often dread seeing that one particular meeting added our calendar. Sounds fun, right? Well, not so much. And yet, it’s still a part of life in many corporations.

Companies must realize that the traditional performance review process does not drive employee engagement or better performance, and that there are more productive ways to evaluate and motivate employees.

I've been trying my whole career to get rid of annual performance reviews—and I'm not alone!

The Horror of Annual Performance Reviews

Performance reviews can be a nightmare. And it's not just because I think they're a waste of time and energy (but yes, they are an enormous waste of time and energy). Even more than that, they're a problem because they create so much stress and tension in the workplace that it becomes an unproductive time of the year.

The typical annual review is often where an employee sits with their manager and gets feedback that they never heard at any point in the year and where a manager sweats for weeks in anticipation of an emotional reaction to give feedback they don’t want to deliver to someone who doesn’t want to hear it.

Does that sound productive?

But the good news is that many companies are starting to do things differently, replacing review time with… well… anything else! I recommend, at a minimum, monthly check-ins where both parties give feedback and adjust priorities as an alternative to this past-its-due-date process.

Performance discussions must be a continuous process. With more regular or scheduled feedback sessions, it becomes natural for both the manager and the employee to develop a healthy, trusting and authentic workplace relationship. The goal of a performance review is to provide feedback, adjust priorities, set goals and discuss employee career plans. This can be done in real time through check-ins as well as through regular one-on-one meetings. The best way to approach this is by asking questions that will give both parties valuable information on their actions and what they need to work on.

Annual reviews can increase fear of confrontation, which results in avoidance. So, at a time when communication should be most encouraged, there’s no space for an open and honest conversation between employees and managers.

The annual review cycle can drain the life out of teams. No one listens, people rarely give direct succinct feedback with examples, there is expectation and anxiety around raises. As a result, the reviewee doesn’t listen to what is said during the review and is overly focused on compensation.

Here are a few suggestions for improving the manager/employee feedback process and fostering open communication:

1. Initiate more frequent conversations about performance. Early on, have a conversation about how often you want to check in, and put the reoccurring meeting on your calendars. You can always skip a meeting if you don’t feel it’s necessary, but it’s good to have a physical reminder to check in as things get busy.

2. Separate the review from discussion of compensation. Performance reviews don’t have to be a formal process, but salary reviews tend to be. Keep compensation discussions separate so they don’t limit when and how you can review performance.

3. Train managers on feedback techniques. Not every manager will be a natural at capturing and delivering feedback. Implementing training to help managers to become better at fostering relationships with employees will help them be more comfortable in their position as a mentor and guide.

4. Include 360-degree feedback. Another downside of the traditional performance review is that it offers a very narrow perspective on an employee’s performance. Instead of only hearing from their boss, it’s often helpful for employees to receive feedback from other people they work closely with, regardless of seniority.

Must Haves for Review Cycles:

1. Management Review – develop a process where employees rate their managers and tie their compensation to management performance.

2. CEO Review – the Board of Directors should hear from employees on the performance of the CEO annually.

"Everything changed when I got that great annual performance review," said nobody. So, why are you still doing them?

About Ann Walsh

Ann P. Walsh, SPHR, is a start-up Human Resource Executive with over 25 years of expertise in architecting and implementing global human capital strategies in high-growth, employee-first organizations. Ann has received certificates in leadership, management, conflict resolution, and negotiation from the Program on Negotiation at Harvard Law School; design thinking from Massachusetts Institute of Technology; and diversity and inclusion at Cornell University's ILR School. She is a certified Senior Human Resources Professional (SPHR) and has a B.S. in finance from the University of Massachusetts, Lowell.

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