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The Evolution of the Annual Performance Review

One of the latest trends in talent management revolves around feedback — specifically the annual performance review. Some companies are ditching it in favor of more frequent, less formal feedback, while others are combining those two approaches and getting opinions from other managers and coworkers and using a 360-degree feedback model. 

What’s becoming increasingly clear is that the traditional model of an annual performance review is no longer effective for many organizations. According to a recent Gallup survey, only 14% of employees strongly agree their performance reviews inspire them to improve.

Whatever your approach, your annual review should not be the only communication or guidance about performance your employee receives. You should be careful to eliminate bias as much as possible and consider input from those who actually work with or for the employee. 

Here are some more ideas on this ever-evolving topic.

Why Most Performance Evaluations Are Biased, and How to Fix Them. HBR: “For many companies, performance review season is kicking off with the new year. Although every organization relies on a different evaluation process, most follow a predictable pattern: First, they invite employees to write about their accomplishments and what they need to improve. Then managers write assessments of their work, offer feedback, and rate their performance on a scale of how well they met expectations. Underlying this process is the belief that by reflecting on people’s performance and codifying it in an evaluation form, we will be able to assess their merits objectively, give out rewards fairly, and offer useful feedback to help them develop in the next year.  But while we may strive to be as meritocratic as possible, our assessments are imperfect and all too often biased.”

Finally, a performance review designed to weed out “brilliant jerks.” Quartz: “Of the many reasons to hate traditional performance reviews, perhaps a less obvious one is that they tend to work to the benefit of brilliant jerks. That’s because reviews typically focus on individual achievements, rather than how employees work with, and treat, their colleagues. And so the jerks keep gaining power and influence, leaving a trail of resignations, lost productivity, bathroom-stall breakdowns, and publicity fiascos in their wake. Atlassian, an Australian-based software company with 3,300 employees globally, has an idea for how to break this cycle. It recently rolled out a new type of performance review, 18 months in the making, in which employees’ contributions to their team and company culture actually receive more weight than their personal accomplishments.”

Research Reveals That Unfair Performance Reviews Prompt Employees to Consider Quitting. HR Technologist: “Reflektive, the people management platform, has released new research revealing that 85% of American professionals would at least consider leaving a job after an unfair job review; more than half are either ‘very likely’ or ‘extremely likely’ to do so. More than one-third of the group of 1,000 full-time workers said the thing they are least likely to tolerate in the workplace is an inaccurate performance review. Another quarter of respondents believe they were passed over for a promotion based on a review that did not accurately reflect their actual performance. And survey results suggest that bias is a leading contributor to this problem.”

Performance Reviews Are Dead. Here’s What You Should Do Instead. Inc: “Anyone who has had the privilege to lead has also had the responsibility of the dreaded annual performance review. We’ve all been through them, but I’ve yet to meet anyone who actually looks forward to a performance review, anymore than they would a root canal. Not only is it stressful for both parties involved but it’s also horribly ineffective. According to the Society for Human Resource Management, and as reported in Slate, ‘95% of employees are dissatisfied with their company’s appraisal process. What’s more, 90 percent don’t believe the process provides accurate information.’ Worse yet, an Adobe study found that performance reviews have no effect on how they do their job.”

Managers, it’s time to give up on the annual review once and for all. Fast Company: “Back in the day, managers and employees across a wide variety of industries and employer sizes lived and died by the annual review. But not only are they a lot of work for everyone involved, they aren’t even particularly useful. Many organizations also provide little or no guidance to managers on how to conduct a performance review, which means that individual experiences can vary tremendously. What’s a multigenerational organization to do? Many have decided to supplement or replace annual reviews with more frequent, ongoing feedback. I think that this is a positive step, and will lead to better outcomes. If you’re ready to remix the feedback you and your fellow managers offer to your multigenerational employees, here are some strategies to consider.”

11 Things to Never Say During Your Performance Review. Glassdoor: “Between the feeling of being thrust into the spotlight, the one-on-one setting with your manager and the gravity of what’s at stake, performance reviews can feel pretty uncomfortable. And when you’re made to feel uncomfortable, sometimes you aren’t always the most conscious of (or careful with) your words. But if there’s one time that you want to communicate effectively, it’s then. After all, your performance review is often the one chance you get to push for a raise, secure a promotion or even save your job. To make sure that you don’t unintentionally sabotage yourself, we’ve put together a list of things that you’ll want to avoid saying. Steer clear of these words, and you’ll be that much closer to passing your performance review with flying colors.”

Need help developing a talent management and feedback strategy for your organization? Contact us to learn about leadership development and coaching opportunities.

Success Labs is a leadership development and management consulting firm in Baton Rouge, Louisiana. For more than 25 years, our expert team of consultants has worked with hundreds of companies to explore their business potential and improve their company and cultural performance. Contact us to get proactive about your people strategy.

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