How Productive Are Annual Performance Reviews?

How Productive Are Annual Performance Reviews?

31 May 2017

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Annual Performance Review ‘season’ is a time of year that is perhaps dreaded by both employer and employee alike. No one is sure what to say; what examples to cite; if anything will change as a result. If you simply undertake the exercise because it’s the way things are always done, how productive is it?

This was very much a hot topic at the HR Network Conference in Edinburgh. Especially since statistics have revealed that 92% of employees think they are a waste of time and the sick leave rate within a business tends to spike shortly after these reviews take place.

It led me to question whether or not this way is the best way to make our employees and colleagues feel valued, and like their career was actually heading somewhere. Could there be an alternative to the Annual Performance Review? For this generation of Millennials, is the system simply outdated?

Of course, the purpose of an Annual Performance Review is to set new goals and discuss any issues from the previous year. It’s not supposed to be an exercise that you put off (because you can’t be bothered filling in an eight page form) and then consign to a desk drawer.

Furthermore, the stress of having to complete said form, regurgitate it to management and then feel like nothing you raise has validity can really impact on employee morale. It’s no surprise that people take time off to recover from a review!

The problems lie on both sides of the table; issues are unresolved and a plan of work rarely comes to fruition. Some managers don’t have the skills or confidence to really put into action certain strategies or processes that would really get the most from their workforce or improve working conditions. Emotionally challenging conversations tend to get avoided.

From an employee’s point of view, some don’t know how to alter their habits for the benefit of their career. Or, they feel like all they can hope for is some positive feedback. There is no clear strategy for change and development. Many also feel that a poor review will somehow affect their ability to either achieve a bonus or obtain a reference.

There is also the issue of time. An Annual Performance Review seems fairly redundant. It makes no sense to store up issues for up to twelve months. This could lead to resentment and frustration. Surely, an informal monthly catch up would be more fruitful in terms of identifying potential problems and nipping them in the bud in a timely manner.

If both sides find the procedure demotivating and unproductive, something has to be done. If too much focus is placed on quantifiables and no one really says what they mean for fear of missing out on promotion, they are not an honest reflection of the work that has been done up until that point.

To get the most out of your employees, you need to create a workforce (and a review system) that everyone is happy to work within. That could mean swapping the formality of an Annual Performance Review for more regular, brief catch ups.

The important thing is to a create a two-way dialogue where employees feel comfortable saying what is really affecting them and what they hope to achieve. The key to striking the right tone is finding a review system that everyone actually wants to take part in.

If you need support building a HR team that could create a positive review system for your workforce, I’d love to able to chat to you. You can get in touch with me, confidentially by clicking here.





Written By Barry Lee


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