Why We Need to Burn the Annual Performance Review

Photo by istockphoto
Photo by istockphoto

Editor’s Note: This is Part 1 of  a series on why the annual performance review process needs to go away forever and what should be done instead. I’ll also share how to do it right and be objective — what a concept!

It’s 3 pm on a Thursday afternoon and Andrea goes into her manager’s office for her annual performance review that she’s been dreading it all week.

She knows the drill — her manager will ask her to read the evaluation form he completed and then he’ll finally get around to telling her what she really wants to know — which is how much her raise is.

She leaves frustrated, just like every year.

She doesn’t think her manager has any idea of what she’d contributed all year, so how could he have accurately rated it? Of course she’ll wait another year to discuss her performance – that is unless she screws something up – then she’ll definitely hear about that!

Why traditional reviews are broken

This is happening way too often and it’s creating employees who are disheartened, disengaged, and waiting for the economy to pick up so that they can find other jobs.

Traditional performance reviews – the way most companies do them — are broken! They don’t work and they cause more harm than good.

Here’s why: In most performance appraisal and review systems, several things happen.

First, we try to fit the multi-faceted, multi-dimensional, complex human being into a predetermined scoring box on the traditional performance appraisal form – it’s destructive.

Then, we have to take into account that we have imperfect human beings ranking the performance of other imperfect human beings on a piece of paper. What are the chances of that going well?

A recipe for disaster

Then, to top it all off, we tie in the conversation about whether they’re getting a raise or not.

And really … this is, and has been, a recipe for disaster.

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We need to turn this entire experience into a verb — an ongoing action instead of a noun, a project that sits on a shelf and comes out once a year. If we want employees to get the most of their performance reviews, there has to be an ongoing stream of information zipping back and forth between managers and employees.

So instead of meeting once a year to discuss why Andrea was put in the “Meets Expectations” box after a year of doing her job, we need to burn that form and throw it away forever. I suggest that we replace this annual nightmare with frequent and brief meetings between manager and employee. We’ll get to what’s going on in the job and the company so that everyone’s in the know, ideas are shared, issues are tackled and our pal Andrea will actually pay attention instead of waiting until the end to hear about what her raise is going to be.

And, I’m not in the minority about this.

Facebook’s 2,000 employees give regular feedback after meetings, presentations and projects – no scheduling. It’s 45-second conversation that consists of: “How did that go? What could be done better?”

7 benefits of moving from annual reviews

The benefits of moving away from this once-a-year process are:

  • Avoiding surprises with performance issues;
  • Eliminate pre-evaluation meeting anxiety and fear;
  • Avoiding inaccuracies on performance issues;
  • Removing the focus from pay to performance;
  • Not defining our employees by a performance score number;
  • Eliminating the sins of recency: that’s when managers only remember what has or hasn’t occurred over the last few months and that’s what they end up putting on the reviews forms
  • Providing clarity for what’s expected of our employees and what they can expect from us

This process is easy but it can get screwed up if it’s not done right and do you know how to do that?

Stay tuned for the next post on how to do this right!

This was originally published on Kimberly Roden’s Unconventional HR blog.

Kimberly Roden is the founder of Unconventional HR. An HR pro turned consultant, she has 25 years of progressive experience as a strategic HR and business leader in a variety of industries. Her hands-on and innovative approach allows her to create and deliver HR solutions to meet business challenges and needs by managing human capital, talent acquisition and technology. Connect with her on Twitter at http://twitter.com/Kimberly_Roden , or at kim@unconventionalhr.com .

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6 Comments on “Why We Need to Burn the Annual Performance Review

  1. – If you can’t say anything original, then don’t say anything at all. The “I-and-my-employees-hate-performance-appraisals” rant is old, worn out and should be dropped as a legitimate topic of discussion!

    1. Thanks for your comment but if it’s so old and worn out, why aren’t HR professionals questioning it and making the effort to influence something better to business leaders? 

      It is a legitimate topic of discussion because employees are affected by this in a negative way and it’s affecting how they’re working as well as their level of engagement.

      I’m sorry, maybe I missed it…but what’s your solution?

      1. Absolutely agree, Kimberly. The performance review isn’t effective anymore…at least in the way it should be. Instead, like you said, feedback needs to happen in real-time. By engaging with your employees often, they aren’t kept in the dark about their performance. 

        Think about it. If performance reviews are only given annually or quarterly, things about bound to be forgotten. Plus, by the time an employee is evaluated, many objectives don’t matter anymore, so the performance review doesn’t give the right sort of feedback. How are employees supposed to improve?

        The better alternative is to create a culture of engagement and feedback, make goals more social, and give recognition. This way, both parties know what’s going on as it happens–and can improve the way they do their jobs in the process.

  2. There is ample published evidence on why the annual performance appraisal does more harm than good. Begin with the links in this article, which include books that are objective, thorough and well cited –  http://www.psychologytoday.com/blog/wired-success/201006/its-time-abolish-the-employee-performance-review.

    Kimberly may be on to something. Perhaps what’s needed to get past this destructive practice, and in particular to be heard above the biased promotion of the commercial firms who profit from the continuation of annual performance appraisals (without regard for its harm to organizations), is some good old fashioned leadership, which Kimberly offers. 

    Since many companies base their management policy on what they hear “everyone” is doing . . . in part because they don’t have the time or other resources to gather the science, experiment and make their own evaluation . . then it can be helpful to the management of these companies to hear case histories and annecdotal stories about companies who jettisoned the annual performance appraisal and not only survived but thrived without it.

    The persistent gap between empirical science and management practice is due, in part, to the challenge of hearing the facts above the roar of commercial promotion. It can be helpful when someone speaks out to support the facts, even if doing so attracts critical remarks from people whose self-interest feels threatened.  

    1. Thank you for your comment James.  Of course anything that’s “different” will attract critical remarks.  People are not accustomed to being out of their comfort zones so why should this idea be embraced? 

      When we peel this entire process apart, piece by piece, we have to wonder what a realistic outcome of this messy process is. The commercial firms are just that — commercial.  There is no concern or empathy for the human element here.  Dig deeper…that human element that turns into disengaged and disloyal employees WILL negatively impact the bottom line of businesses and its customers.

      Best Practices by the big consulting firms are BS.  Best practices are the individual processes that work best for each individual organization.  It’s not a cookie cutter process. 

      Humans are versatile and dynamic.  Humans make businesses work.  HR processes need to be aligned with this.

  3. Kimberly thank you for facilitating the discussion (and it is far from old and worn out because the masses are still doing the traditional approach, despite the majority of feedback in protest of it). James thanks for citing the research behind it, too. I was pleased to see my boss mentioned in that link (Gary Markle, creator of Catalytic Coaching) because we’re in agreement 100% that the performance evaluation as we know it, needs to go away. It weighs a lot (burdensome on HR and managers) and produces little (employees hate it, it tends to be void of producing positive change and it provides far less legal protection than commonly believed). Interesting topic – happy to meet others with the same mission to rid the business world of the performance review. Cheers!

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