Employee appraisals, performance reviews, feedback discussions – a process has many names! The purpose, however, is the same regardless of what we call it – to increase employee motivation, performance, and well-being. Most people probably agree that annual performance review talks are not the optimal method for achieving these effects. Is it time to scrap these once-a-year meetings, and instead focus on scheduled evaluations?
Here are five reasons why you should reconsider annual performance review meetings and shift to more a more systematic form of discussion.
1. It contradicts everything Agile HR stands for
Are you familiar with the concept of Agile HR? It’s not surprising because it’s a buzzword that’s been buzzing around since 2012. Agile HR is a method that advocates all processes and projects being conducted in a flexible and agile manner. The reason the approach has grown so exponentially is that organisations need to adapt to a complex world where demands are always changing. It’s glaringly obvious how the traditional personal appraisal talks strongly contradict the Agile method:
- An agile approach strives for dynamic objectives. Annual targets quickly become outdated.
- It seeks a robust feedback environment. Annual feedback is not enough to create commitment among employees.
- It strives for cooperation and strong team spirit. Annual performance appraisals, without links to employees’ teams, do not get the job done.
With this in mind, it’s really a question of why annual employee appraisal talks are still standard for so many organisations!
2. Development is achieved through dialogue
Everyone knows that the best discussions take place in a conversation, not in monologue. During a traditional annual meeting, the supervisor is the one with the most questions and thus leads the discussion in the desired direction. This asymmetry is often something the employee is unaware of, but it has a significant influence on the nature and outcome of the talk.
Furthermore, an appraisal talk is mostly about evaluation, rather than development, which is not a proactive way of working with employees’ performance and well-being. Discussions where the supervisor listens and gets to know an employee’s day-to-day duties are a much better starting point.
3. The labour market is in a state of flux and is flexible
The time is right when organisations employ people who will stay with a single company all through their careers. In today’s labour market, conditions are changing daily, both because the market is evolving, but also because employees are more transient. When an employee leaves a workplace, staff turnover increases, which is both costly and burdensome for the remaining staff. It is, therefore, of utmost importance that organisations focus on employee engagement and skills development. From this perspective, managers should find more conversational opportunities that shed light on areas such as employees’ ideas for development, future prospects, and goals.
4. Annual feedback is not enough
In just over five years, 75% of the global workforce will be made up of the millennial generation, according to a study by EY. Something that characterises the generation is that they are both flexible and transient – if they are not happy with their employers, they will find new ones. Millennials want to feel motivated and seek a working environment where they are appreciated and can contribute to something meaningful. They are looking for leaders who will provide them with the opportunity to reach their full potential and develop as individuals. Getting feedback at an annual performance review talk will not produce the required results. Frequent evaluations that focus on employee strengths, motivation and development potential are more effective in retaining the talents.
5. A lot happens in a year
Just like a good salesman collects information about customers’ needs, the best leaders pick up on employee signals. To pick up these signals, managers must have more frequent catch-ups with their employees. Mainly since the data collected from the annual employee appraisal talks will be out in a month!
With continuous evaluations, employees and management staff can maintain a dialogue about what works and what doesn’t. Furthermore, the manager gains the opportunity to detect signals that may indicate ill health and other problems. To sum things up, scheduled evaluations shed light on minor annoyances that might bother an employee; inconveniences that could eventually lead to an employee resigning.
An alternative to annual performance reviews
- Arrange scheduled employee evaluations on a weekly or monthly basis that focus on maintaining a proactive dialogue instead of a reactive summation.
- Use temperature measurements that transparently and automatically present your organisation’s strengths and development areas.
- Initiate group discussions that shed light on issues such as work environment, leadership and commitment.
- Work strategically with goal management through, for example, OKR goal formulation.
- Empower employees to advance their skills development.
- Create a corporate culture characterised by openness, honesty and straightforward communication.
- Ensure a strong culture of feedback where daily feedback is encouraged.
- Give leaders work processes and tools that give them the prerequisites for being the best versions of themselves.
The annual review talks belong to an old tradition that does not meet the demands of our fast-moving world. With everything that can happen in the course of a year, annual goals and feedback data quickly become outdated. Furthermore, employees require continuous feedback to maintain a high level of engagement. To implement Agile HR throughout the organisation, these yearly talks are not enough. Focus instead on scheduled and individual evaluations, employing dialogue with a proactive focus.