The Death of the Annual Performance Review

Imagine that you’ve just been scheduled for that once a year performance review with your supervisor. What are some of the thoughts racing through your head? I wonder what my supervisor thinks of my performance? Did I do my job well? Am I about to get put on a performance improvement plan? Is she upset about that report I submitted a week late?

Now imagine that you’re the supervisor who is about to have that performance review with your employee. What are your thoughts now? I have no time to finish these 8 performance reviews before they’re due next Wednesday. How do I tell Amanda she needs to stop gossiping without sounding too harsh? What’s the point of giving my staff an exceptional rating if I can’t give them a bonus or promotion?

These, and many other issues probably come to mind .

The most common complaints we’ve heard about the annual performance review from both the employee and supervisor perspective are that it:

1. Is a complete waste of time
2. Is demotivating
3. Is time consuming
4. Doesn’t represent actual performance
5. Is pointless because the supervisor just copy and pastes their comments for all employees
6. Isn’t well delivered because managers aren’t trained to do them well
7. Is not done at all

Because of these issues with the annual performance review, more and more organizations (GE, Accenture, Deloitte, Microsoft) are moving away from the process. Our local government is exploring the question: can we get rid of the annual performance review? Through collaboration with various HR Directors throughout the city, we’re researching alternative processes that can replace the annual review.

In our research, we found that the organizations that have gotten rid of the annual review are doing three core things to increase employee engagement.

• Frequent Check-Ins: Companies are having weekly check-ins to recognize accomplishments, clarify priorities, and identify development areas. These meetings don’t have to be long. Deloitte has a quick 4 question format, two of which are yes and no questions. While there are critics of the content of their questions, the idea of only have four core questions is powerful because it’s simple, consistent, and direct. Some sample questions could be: are you growing, what can I do to better support you, what accomplishments are your proud of, and what are your priorities this week?” Based on the employee’s responses, the supervisor would coach, redirect, clarify, or support the staff by removing obstacles.

• Goal Setting: Another popular practice is requiring all employees to create SMART Goals. SMART goals are goals that are specific, measureable, attainable, realistic, and timely. These goals are employee generated, but supervisors help ensure they are in alignment with the department’s goals. Goals that are supported by a supervisor are powerful. They ensure that employees are continuously moving forward in their careers and engaged in their work.

• Clear Expectations: The number one reason people don’t meet expectations is the lack of clear expectations. People, in general, want to do a good job. According to the book, DRIVE: The Surprising Truth of What Motivates Us, one of the three drivers of motivation is mastery – which is the pursuit of doing something well. When people don’t know what they’re supposed to be doing, or how their performance will be evaluated, they shoot in the dark, doing what they think you want them to do. They hope the outcome is what you would like to see. Great employees can often get frustrated when they get constructive feedback because even though they work hard at something, it wasn’t what the supervisor wanted them to work on. By setting clear expectations and giving continual feedback through frequent check-ins, you can avoid the mess and bad feelings.

How will we hold people accountable?

One of the main concerns we’ve heard from managers is the lack of accountability if we don’t have the annual performance review. There are several issues with this concern. One is that an annual review is not the place to hold people accountable. It suggests that you have to wait weeks or months just to address a performance deficiency when the right way to do it is immediately after the deficiency is discovered. Accountability is addressed when you set clear expectations and have frequent conversations about performance. When this becomes standard practice, personal accountability increases.

While our city has not completely replaced the annual review yet, we’re exploring the best practices of organizations that have gotten rid of it. In the comments below, share your thoughts or experiences with the annual performancereview. Do you think it should be replaced?

Ellen Steinlein is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). Check her out on LinkedIn and Facebook too! To see more Featured Blogger posts, click here.