Why You Should Ditch Annual Performance Reviews

    January 30, 2019

    Many companies have already ditched the annual performance review. If yours isn’t among them, then 2017 is the year to make this change. Read on to discover a better way of evaluating employee performance.

    Annual performance reviews can be inefficient and ineffective

    There are a number of problems associated with annual performance reviews. First and foremost, reserving sufficient time every 12 months to prepare reviews, discuss them with employees, and then write up reports is a significant time commitment for managers. It’s also one that takes them away from their regular responsibilities.  

    In addition, as Iman Jalali states in his Entrepreneur article “Should You Ditch Annual Performance Reviews? It Depends,” annual reviews erroneously assume that an employee’s role doesn’t evolve during the year. In reality, employees are often assigned new responsibilities during the year—and they usually get better at these tasks over time.

    Finally, the once-a-year frequency only provides feedback after the fact instead of as it happens. This doesn’t enable employees to improve in real time, which can lead to considerable frustration on their part.

    A better alternative

    Clearly, the annual performance review is rapidly becoming obsolete. However, simply ditching it without establishing a new way to evaluate employee performance isn’t a smart choice.

    A better alternative is to implement frequent check-ins with your employees, for example bi-weekly or every month. These check-ins should take the following three factors into account:

    1. Employee goals. Offering career paths and helping employees advance is critical to retaining talent. Managers should be aware of their employees’ goals and assess their progress during regular check-ins.

    2. Employee performance. Employees should know what’s expected of them and how their performance contributes to the company’s objectives. Regular check-ins allow managers to assess performance and provide support and guidance when necessary.

    3. Employee engagement and satisfaction. Engagement and satisfaction have an important impact on performance. Regular check-ins provide managers with a way to assess their employees’ feelings toward the work and the company, as well as address any issues that come up to reduce engagement.

    Using frequent check-ins, instead of annual performance reviews, can provide better visibility of an employee’s performance and engagement. And when regular communication results in mutual understanding, there’s no telling how far you and your team can go. 



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