EverythingPeople This Week!

Published on Tuesday, February 28, 2017

How to Do Away Annual Performance Reviews and Why

Author: Heather Nezich

A recent survey revealed that 58% of executives think that their current performance management approach does not drive employee engagement or high performance.  More and more companies are doing away with annual performance reviews all together.  But how are they doing it successfully?

In order to successfully get rid of performance reviews, a company must have a viable alternative in mind.  Some examples of how others have done it include:

Adobe: They replaced the annual review with “check-ins,” which are ongoing one on one discussions with employees and their managers.  During the regular one on one conversations expectations are set, feedback is given, and work is recognized.

Deloitte: At Deloitte managers check in with employees once a week.  They set expectations for the next week, review priorities, provide feedback on recent work, provide coaching and direction, and update the employee with any new information.

GE: Managers at GE have regular “touchpoints” with their employees where they set priorities based on customer needs.  Managers coach instead of critiquing.

Booking.com: They transitioned to quarterly 360-degree reviews where managers collect formal feedback from everyone.  They then follow that up with one on one discussions.  They still conduct an annual review that revolves around compensation.

The leadership advisory firm CEB found that 12% of Fortune 1000 companies are doing away with the annual performance review.  This is up from just 1% in 2011.  “There’s a growing understanding within the HR industry that the annual performance review just isn’t a good way to manage people or boost performance,” said David Brennan, general manager of Achievers – a firm that helps businesses reward and recognize their staff.

Regular feedback helps employees feel more appreciated and motivated.  Yet according to Achievers 60% of employees state that they do not receive regular and timely feedback from managers.

Some tips for moving away from annual reviews and into having successful, one on one, interactive discussions include:

·       The one on ones should not be status updates on projects. It should be about the employee’s needs, frustrations, feedback, ideas, and career growth.

·       Inform your team ahead of time what to expect from the one on ones.  Set expectations.

·       Schedule weekly or bi-weekly meetings for 30-60 minutes, but allow for “drop-in” discussions as well.  If feedback, positive or negative, is warranted give it immediately.  Don’t wait for the scheduled one on one.

·       Keep it informal.  Consider getting out of the office setting – take a walk, get coffee, go to lunch, go to a more informal place within the building, etc.

·       Set actionable follow-up items and write them down.

·       Follow up on the actionable items in the next meeting.

By meeting regularly with employees and giving feedback throughout the year, you can reserve the annual discussions to focus around promotions and/or compensation.  You’ll also find yourself better prepared for that end of year compensation discussion by having notes taken throughout the year that document employee progress and accomplishments.


Sources:  getlighthouse.com, fastcompany.com, entrepreneur.com


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