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Is it time to abandon annual performance reviews?

Frustrated man on laptop

(This is part#2 of a series on PEOPLE – see part#1 here)

Managers and leaders have to re-wire their organisations to evolve in order to satisfy these needs and still perform in a competitive and challenging environment. They need to constantly calibrate their purpose in an ever-changing global marketplace.

What is irrefutable, is that the current management practices are failing…and miserably.

A case in point is the annual performance management review – still in vogue today. Whilst even its usefulness as a compliance model for compensation, promotion or termination is questionable, there is little evidence to support its effectiveness in improving either performance or its management.

A major concern is the the year-long time frame gap to provide and receive feedback. It’s just too long! In the current work environment many staff would have entered and exited the organisation between the 12-month cycle.

How does either participant remember, collate and review a year’s work? Is it unreasonable to expect a meaningful discourse given the hour or two usually allocated for such reviews.

Another criticism is the retrospective nature of performance reviews. Looking in the rear-vision mirror on a year’s work can be unfair and arbitrary.

In reality, managers often tend to treat the process as an end-of-year drudgery conducted over a few days through a series of back-to-back interviews. Meeting fatigue is not unusual and conversations tend to skew towards the near-term and recent past.

All of this has resulted in the conventional performance review simply not working. According to OfficeVibe 53% find they do not motivate them to work harder and for 30% it actually decreases performance.

So what shall we do instead?

In our work to-date across various organisations, peak performance and engagement relies on four key practices:
1. Humanising the Employee – Understanding their personal context, their strengths, their weaknesses and their aspirations.
2. Rather than retrospection, looking forward using a Performance Plan where clear goals are set using a framework for efforts and results.
3. Regular meetings (at least monthly) to monitor performance against the Plan whilst allowing for agility to the changing environment.
4. Considering ones Engagement Factors (Reward, Recognition, Voice, Choice, Learning & Legacy) to correlate with their performance.


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