Who hates annual employee performance reviews? Everyone, that’s who.
Employees hate them, managers hate them. HR probably hates them.
There are plenty of studies and articles and trends to back this up. Like this one. And this one. Publications like The New York Times and The New Yorker are spreading the word. And there’s even a book about how much performance reviews suck.
So, what’s the solution? Resigning ourselves to stick with something that doesn’t work? There has to be a better way.
I’ve experimented with many different ways to conduct performance reviews. Formal. Informal. Annual. Quarterly. Ad hoc. Paper. Online. 360 reviews. You name it, I’ve probably done it.
The problem with performance reviews has been written about extensively (as evident by the links above). The bottom line is that they are:
- Not agile and therefore not aligned with the rhythms or realities of the modern workplace.
- Often not specifically relevant to the employee’s role or their actual contribution.
- Too time-consuming & too cumbersome to administer, so managers and staff just go through the motions.
- Potentially damaging to the employee/manager relationship unless the manager is highly skilled at giving the right feedback and coaching for improvements.
- Not consistently effective at getting the outcomes you want from the employee.
- Easily buried away in some folder and quickly forgotten about just a few days after the review (i.e. not relevant to the realities of work).
My solution: Just do away with the annual review. It’s a relic.
My biggest problem with annual performance reviews as the primary formal feedback mechanism with an employee is that workplace goals, strategies and tactics change too frequently for a yearly review to be relevant.
People also ebb and flow too frequently for an annual review to be relevant. Yes, employees have certain characteristics that don’t change much over time, but they also have so much that can impact their situational work performance—from the specific nature of their most recent projects and responsibilities, what is happening in their personal life, even what’s happening within the walls of the office or the company culture. I am not saying an A player drops to a C player. Individual performance is nuanced and never really static.
If you want to throw traditional performance reviews out the window and take a more agile approach, here is what I found worked best for me:
Frequent, regularly scheduled meetings
Meet with each of your team members regularly, without fail.
When you approach reviews as something that should be agile, the nature of the meetings will shift over time. Sometimes one-on-one meetings will be perfunctory. Sometimes you will dive deep into issues or trends you are seeing. Sometimes it all be a ‘roll up your sleeves’ working session to hash something out together. Sometimes you will use the time to course-correct or give specific feedback. Sometimes your team member will give you their thoughts and feedback on concerns or opportunities.
And for those times when you have something very serious to cover, simply document it by sending a brief recap email, with any necessary action items, after the meeting. Other than that, don’t get too hung up on the formality of the meeting. If you need some type of mechanism to keep track of action items, to-do lists or major initiatives, a Trello board that you share privately with your team members can help and is easy to keep up to date from week to week.
Here’s the thing, if you are having productive, meaningful meetings on a regular, frequent basis with your employee, why would you need an annual review? I am not sure you do. When things are really off track, you are both going to know about it because you are going to be talking about it and trying to solve the issue.
I am a fan of 360 reviews when used carefully as a tool for personal and professional growth.
My approach to 360 reviews is to NOT share all of the ratings and comments directly with the person who is being reviewed. Instead, I use it to help create a whole picture of the employee for me so I can better coach them for improvement. When I do a 360 review it is because I want to give the employee’s team members and/or direct reports the opportunity to anonymously share candid feedback about their coworker. Rather than do them on a regular, annual schedule, I like to take an ad-hoc approach—using them when it feels like the time is right (which ends up being every 12 to 18 months, on average).
360 degree reviews can illuminate aspects of the employee’s performance, attitudes and behaviors that you may not be privy to in your day-to-day interactions. And let’s face it, jerks usually know how to hide it in front of their managers, so bad behavior tends to be hard to root out.
It helps to know what coworkers think about the employee and understand their experience and perspective. It can reveal strengths and weaknesses that you might be overlooking.
My approach is to conduct an anonymous 360 review with the employee’s coworkers (and/or direct reports if that is applicable), review the feedback and then decide what to share from the 360 results, if anything. Sometimes I only use it to help guide some of the feedback or direction I give the employee.
Wildcard: Formal meetings
There are times when you need to schedule a more formal meeting with an employee to discuss their performance—either when they are performing exceptionally well or poorly. When an employee is doing a really exceptional job, it is time to lavish praise on them. This may be combined with a meeting to inform them of a promotion, a bonus, a new set of responsibilities or a raise. Take time to sit down outside of your regularly scheduled meetings, one on one, simply to praise a top performer and thank them for their contributions. They will appreciate it and remember it.
On the flip side, when an employee isn’t doing a good job, you have to put all the cards on the table in a formal meeting (ideally with HR or another trusted executive present). These meetings should be clear, concise and direct, communicating the areas that need to improved, and ideally informing them of areas they are performing well in. Meetings such as these should always be documented—formally via a written letter that states the issues and remediation plan, or informally via email (depending upon your company culture).
The key to getting rid of the annual review
To do away with annual reviews you just need a few tools that are probably already at your disposal:
- Schedule a regular, predictable cadence of meetings. Don’t miss or reschedule them.
- A system or tool for tracking meeting notes, as well as goals, initiatives, progress, and outcomes (OKR tools are great for this!).
- A consistent approach or document you use when things are off track with an employee.
- Defined times to assess compensation and make adjustments (either at the annual employee anniversary or at the same time each year for all employees).
Bottom line: Find a more agile path forward
After years of experimentation and trial error, I can say that it is important to find a process and cadence that works for you an that you can keep up with on a consistent basis. I no longer believe in the formal annual review, which is obtuse, overly time consuming, bulky, and too easily buried and forgotten.
Shorter, more frequent feedback sessions are what is needed and if those meetings include goal setting, tracking, feedback, and coaching, you will cover all the bases. Don’t do annual reviews just because you think you should.