Is your company still conducting annual employee performance appraisals? A growing number of industries and companies are moving away from the practice of annual reviews, and for good reason. This traditional method of providing employee performance feedback has numerous shortcomings.
Some of the issues with annual reviews:
Key accomplishments earlier in the year are often forgotten.
Recency effect - the employee ends up being rated on their most recent performance, rather than the entire year.
Inadequate rating scales - in the pursuit of uniformity and objectivity, most evaluation forms provide limited capacity for effectively evaluating an employee’s performance.
Lack of opportunity for meaningful feedback - standardized performance reviews often become a deadline to meet and a box to check, rather than a time of meaningful dialogue.
All of that being said, I’m not inherently opposed to a more formal annual review. I think they have a place in reviewing progress and in facilitating promotion and pay raise considerations. I do, however, advise strongly against relying on the annual appraisal process as your primary method of relaying feedback for employee performance.
If your company is continuing the practice of annual reviews, here are some key suggestions:
Schedule quarterly interim reviews – at a minimum conduct a review every 6 months.
Keep a monthly log (whether in a notebook or a file) of employee achievement/progress, and an email folder for each employee – something to keep an on-going log.
Supplement standard forms with meaningful guidance and feedback.
Make sure nothing in your review is a surprise to the individual. If you are providing regular, on-going feedback (both positive and critical), nothing should surprise the employee. You wouldn’t want to be blindsided by criticism and you shouldn’t do that to your direct reports.
Don’t avoid difficult conversations and critical feedback throughout the year and then use the annual appraisal as the opportunity to give the individual a laundry list of complaints. This isn’t fair to the person and it isn’t effective.
The performance review should be just that – a review. Use the opportunity to reflect back on the year and plan for the upcoming year. Set 12-month goals and then break them into quarterly measurables, then review those benchmarks each quarter in the upcoming year. And of course, provide real-time, on-going feedback to each person (don’t wait for each quarterly review).
It’s ok to keep the practice of annual reviews, but ensure that it isn’t your primary (or only) method of communicating feedback to your team members.