Why the Annual Review Needs to Be Changed

Posted July 7, 2016

Technology is forcing all kinds of changes in the workplace, and the annual performance review is a human resources tool that needs considerable reassessment.

The yearly performance evaluation has a few goals: Reveal insights on performance to both managers and workers, discuss goals, talk about constructive criticism and set up an environment for honest feedback. However, the annual review often doesn't fulfill these goals.

Rather than looking at performance reviews as a separate task, management should focus on constant improvement paired with regular feedback throughout the year. By examining, reviewing and enhancing systems and internal operations, an organization can be totally transformed by a reformed review process.

Problems with the annual review

Business moves at a much faster speed today than in years past, with goals and projects assessed in days and weeks - rather than in months, quarters and years. Hence, annual performance reviews don't keep pace with modern productivity.

Furthermore, organizations are putting greater emphasis on team success over individual results. At a business where employees are connected by technology and results are produced by a virtual team, annual performance reviews don't reflect how most work is done.

In the standard performance-review dynamic, the supervisor is above the employee and this arrangement gets in the way of an honest dialogue. Yearly reviews are also often weighted by supervisors' inherent bias - which could result in a non-productive conversation about performance or an inaccurate overall review.

Also, performance reviews are often tied to pay raises and yearly bonuses. While workers may look forward to a performance review for these reasons, the possibility of a financial reward also gets in the way of an honest conversation.

Leveraging technology

Instead of tracking performance on paper, many companies are using automated systems to assess, track and report on worker progress. Along with being more environmentally friendly, workers reap the benefits of real-time feedback and evaluation. Under this system, businesses and their workers can readily recognize co-workers or supervisors for good work, and flag probable problem areas for managers to follow up on.

Along with going paperless for simpler, more regular feedback, many businesses are holding regular monthly discussions or biannual discussions with each worker. Using an organized format, these discussions help to regulate the feedback process, offer the chance to evaluate recent and continuing performance, and permit businesses to check into progress with more consistency.

Rethinking old habits

The supervisor's function is increasingly moving to that of coach. This doesn't mean teaching skills, like a basketball coach teaches shooting technique. It's about helping workers see areas where they should want to improve. Managers should use questions and observation to lead workers toward learning and assessing themselves.

With the help of digitally tracked performance metrics, managers should also be working to align company goals with workers’ individual professional goals. This includes a professional development program for employees that incorporates performance metrics.

At Ambassador, we work to provide our partner companies with the highest performing employees. If your organization is looking for a talent acquisition solution, please contact us today to work with a leading employment agency in the South!