Some have argued that the annual performance review should have been ditched ages ago. After all performance reviews are taking into account what employees did 12 months ago and it’s a process that most managers and employees alike detest. According to a recent Washington Post article, consulting firm Accenture along with several other fortune 500 companies, including Microsoft and Adobe have decided, to do away with performance reviews and/or replace it with a easier process.
But how did a process that was so beloved by so many companies, and used as a barometer to; gauge performance, enhance benefits and employee pay premiums and bonuses elicit so much hate in recent years? Times have changed and, in most cases, the annual performance process has not. And, according to an article by Ratan Tavawala for Eremedia here are three reasons why:
“Work is different-Work moves at a much faster pace today, with goals and projects measured in days and weeks instead of months and quarters. Performance reviews traditionally occur on a twelve-month cycle — which means they’re not keeping pace with production. In addition, companies are putting greater focus on team success over individual outcomes. At an organization where global teams are connected by virtual technology and work outcomes are a shared experience, individual yearly performance appraisals do not reflect the reality of how work is accomplished.
Ties to compensation– Historically, pay raises and bonuses have been directly tied to performance appraisals. This sets up a skewed power dynamic that can hinder the type of candid conversation that leads to real improvement. Separating employee performance discussions from raises allows for more focused, coaching conversation about day-to-day job performance, areas for improvement, professional development resources, and opportunities for growth.
Lack of honest dialogue-The power dynamic at play in traditional performance appraisals is top-down, with few companies focusing on assessing the supervisory and leadership skills of managers. Allowing employees to provide feedback to (or even formally evaluate) their managers not only improves efficacy, but leads to better employee engagement and empowerment.”
Traditional performance reviews have been, for many years, anxiety inducing, and have been reduced to an awkward for managers. Employees, in turn, cringe at the notion of having to sit in front of their manager to go through this process, which from their viewpoint is an exercise filled with criticism.
So, what’s the answer? Why not look at changing it. As some have suggested, instead of doing an annual review, reduce it to once a month or better yet, spend a day with your employee while they are performing their tasks and offer feedback. Whichever method you choose, one thing is for certain the old way of doing performance reviews are out of step with today’s workforce.