How Your Yearly Performance Reviews are Sabotaging Engagement

I was talking to an HR Manager the other day and she was expressing her dislike for annual performance reviews. She wants to replace this archaic process with something that’s more effective. That got us talking. What are the goals and outcomes associated with doing an annual performance review and are they being accomplished? We concluded that waiting until the end of the year is actually the worst thing you can possibly do for employee engagement. Why?

Let’s start with a quick examination of the annual performance review. What are some reasons why we do them?

• So employees know what they are doing well
• So employees know what they need to do better
• They are standardized
• Provides an easy way to calculate a salary increase, or lack thereof

That’s why we do them, but the actual purpose of a performance review is to ensure we develop an employee so that they’re more productive and satisfied. Ask yourself if your performance review system is delivering on that.

A poll with 2,677 workers found that 98% believe annual performance reviews to be unnecessary. Of those polled, 645 were HR managers, 232 were CEOs and the remaining 1800 were employees. What are we missing by continuing to take this approach? I would argue we are missing the bigger picture: An opportunity for you to become a better coach and for your employee to develop their skills and behaviors.

A more timely model

Instead of  having a formal sit down with an employee once a year to talk about their performance, let’s provide real-time feedback to employees – both constructive and reinforcing. More than that, let’s provide them with the tools, mentorship and encouragement they need to develop.  

What does that look like? Well, simply giving someone immediate, direct, open and honest feedback when you observe a behavior you either want to reinforce or discourage. Supplement that with regular one-on-ones with your direct reports to discuss progress and development.

If you find eliminating the annual performance review to be daunting, do it gradually. Start by adding in quarterly meetings, then monthly, then weekly, and finally, daily and instant interactions. Through two-way communication, regular feedback, encouragement, support and coaching, you and your employees can build relationships that will help you both grow. By 2025, 75% of the workforce will be millennials. Research has found that this group prefers real time feedback and coaching. Prepare now for the workforce of the future.

How assessments can help

Our customers use The McQuaig Self Development Survey along with instant feedback to guide the coaching and development process for their employees. The McQuaig Self Development Survey creates self-awareness by:

• Providing a behavioral profile with behavioral strengths and gaps
• Helping employee’s prioritize which of their strengths they’d like to develop
• Teaching employees how to manage their developmental areas and selecting which to work on
• Getting coach/manager input through discussion of a Personal Action Plan
• Encouraging review of targets set in the Personal Action Plan on a regular basis.

This puts the power and tools needed to develop into the hands of your employees and the guidance to help them along into yours. You can work together, with two way communication, to become a better manager while your employee works to develop themselves as an employee.

Our Manager’s Coaching Cheat Sheet can help in navigating the development process and can be found here.

Where do you stand on the annual performance review? How do you evaluate the progress made by your employees?

Image courtesy of Flickr CC and David Spinks