It’s Time To Scrap Annual Employee Performance Reviews


Multi national companies right down to smaller businesses are still wasting their time with yearly or six monthly employee reviews. This work practice is outdated and ineffective and can actually stunt business growth and drive down profits writes Mike Irving.

Realistically these 6 and 12 month staff reviews have simply become a tick in the box exercise that can be a burden to both parties involved.
It lacks clear objectives and can often leave staff second guessing themselves while they wait to hear if they’re performed well at work or not.
The whole process can be de-motivating for staff and often supervisors can feel compelled to give higher appraisal ratings, which employees may not deserve, in the hope of keeping staff loyal rather than defensive.

Let’s not forget the hours spent conducting these meetings and writing reports, which equates to a large financial cost to the business without a demonstrated return.
Some global companies like Deloitte are starting to realise how pointless annual staff reviews are and instead are giving ongoing feedback with a weekly ten minute check in which staff have embraced.

Regular communication between staff and their supervisors, with no forms being filled out, is one of the best ways to improve performance amongst workers.
It’s common sense really. If a boss is available to hear staff concerns or even new ideas on a regular basis then it’s more likely immediate action could be taken rather than 12 months down the track.

Any concerns a worker may have won’t end up becoming bigger problems because they will be dealt with in the early stages.
There is a lot of talk about ways businesses can improve employee engagement. In fact, it’s quite the buzzword/topic at the moment. The real problem is not employee engagement. It’s employer (or supervisor) engagement. Employees respond well to engaging supervisors and business owners. Annual reviews are an example of a lack of regular and consistent engagement from supervisors.

One action I strongly recommend business owners and supervisors take is regular check-ins. I’m talking about a brief one on one informal meeting between a supervisor and employee. The regularity of these meetings will build stronger relationships. It will also improve morale as employees will know what they think is valued.
Smart business owners hire people that are better than they are in specific areas so they can solve problems the business doesn’t know how to solve. This relationship is vital for both parties to engage in consistently to get the desired result. It’s the fundamentals of cooperation – a shared brightness of future, frequency of interaction and provokability (which is good quality communication even in the tough conversations).

Consistent team meetings will create a culture where feedback and opinions are shared increasing engagement between everyone involved. Everyone on the team will start to look forward to these meetings and feel comfortable contributing with new ideas. This empowers everyone on the team to take ownership of and help to provide solutions to problems the team is facing. It also reduces the likelihood of separation and ‘us versus them’ mentality between different divisions of a business. It helps everyone to see that they are working towards the same objective and to solve problems as a whole.

Personal Development is key in getting the most out of your existing staff. Training programs tailored to individual staff members on a one on one basis will improve skills and confidence. It will also boost morale as staff will be excited by learning new concepts and work. They will feel challenged and valued. People who choose employment want more than just money out of the deal. They want to feel valued, be part of a team and they want to contribute. Developing people goes a long way in supporting that to happen.

Acknowledging staff and their contributions are important. Staff likes to hear regularly how well they are performing at work and will often strive harder to achieve positive feedback.
Creating a culture where each individual acknowledges themselves for what they get done will improve performance far more than any performance review ever will. A person’s perception of their own value and therefore their confidence, is either determined by acknowledgements from others, and / or acknowledgements from themselves. If your team is always waiting for acknowledgements from you (or their supervisor) their confidence is being affected and so is their performance. It’s far better for the source of that confidence to come from themselves and that is a cultural thing within a team. BFM'

Founder, Advanced Business Abilities I Business Coach I Recruiting Systems I Sales Coach I Communication Training

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