Moving Away From Annual Performance Reviews

In our recent article on Five Workplace Trends for 2017, one of the trends that we identified was that Annual Performance Reviews are starting to become a dated practice and that there is a need to have more of a continuous process for performance reviews.

Why the Annual Performance Review is No Longer Effective

There are a number of reasons as to why you might want to reconsider your annual performance review process.

  • Professionals today desire instant feedback. Millennials and the younger generation tend to be less patient and unwilling to wait a full year prior to having a full performance review.
  • Twenty five percent of employees feel that annual reviews do not help improve their performance.
  • The average tenure with an employer is getting lower. Turnover of staff may be happening quicker as a result, employees do not want to wait the better part of a full year to see how they are doing or to negotiate compensation.
  • Organizations are more dynamic meaning that the company’s goals may change quicker and that the direction of the company needs to be aligned. An annual performance review is simply not effective to line up with these type of dynamic events.

Employers, HR Managers and employees all have different opinions on the effectiveness of an annual performance review and of performance reviews in general.  There seems to be a major disconnect between the vested parties.  So then how do you know if you should move away from the annual performance review process?

The fact is, the workforce has changed dramatically especially with Millennials and gen Z employees.  They seek immediate gratification, feedback and expect to be a part of something.  As a result regularly following up with employees to provide feedback and track progress outside of formal performance appraisal meetings has become increasingly important.

How to Determine if You Should Move Away from Annual Performance Reviews

  1. Poll your employees. See what they feel is the best timeline for sharing feedback and reviewing performance.  Chances are they will ask for more regular feedback.  While managers and employees may not like the review process, more frequent check-ins means less surprises and should help ensure that everyone is on the same page with regards to goals and responsibilities.
  1. Consider whether you should conduct team reviews or individual performance reviews or both. This may determine the frequency and style of the performance review.
  1. Understand the dynamic of your work force. Do you have a number of part-time or temp workers?  Do you have a blended workforce with contractors and freelancers working alongside of your full-time employees?  Can your managers handle more frequent check-ins and reviews?
  1. Review past exist surveys. Have employees left the company as a result of not receiving necessary feedback, recognition or acknowledgement?  If your company is suffering high turnover rates with short periods of time, you might want to rethink having an annual performance review.

Of course there are other ways to test the effectiveness of your Annual Performance Review process.  The fact is that an annual performance review is probably no longer effective as it was in the past.  Open and regular communication on performance can improve productivity and if anything increase transparency.

As we enter 2017, you may want to revisit your performance review process and determine how you should conduct performance reviews throughout your organization.

Are you an HR Manager who needs some HR consulting, setting up performance reviews or simply needs some recruiting assistance? Contact Aspire Recruitment Solutions at 778-484-0161.

Aspire Recruitment Solutions is the leading human resource solution and employment agency provider to clients in Kelowna, Vernon, Kamloops, Northern BC and Alberta. We connect great employers with the best candidates every day.