Knowledge Center

Articles

Article -> Keep or Eliminate Annual Performance Reviews

Date Added: June 2017

There is much discussion to keep or eliminate annual performance reviews. This is becoming more relevant with Millennials being a large part of workforces. Eliminating reviews and replacing them with a different process is ideal with the right leaders in place.

“Old school” reviews were done annually, and unfortunately, this was the only time many leaders provided employees with any feedback. Even if reviews are done once per year, leaders should provide continuous feedback to employees. This should be part of monthly one-on-one coaching discussions, weekly phone calls, and immediate feedback after meetings or other interactions.

Millennials – and all employees – want transparency and open communication with leaders. Employees should receive immediate feedback, good or bad, so they can learn, adapt and improve. Receiving immediate feedback allows employees to learn and improve more quickly; and the only way they will know this is if they are receiving this more frequent feedback as part of their daily jobs instead of only during review time.

Adapted annual reviews no longer involve a fully detailed performance review. Rather, monthly conversations to review expectations, give and receive feedback, assess annual goals, and provide opportunities for personal and professional development. While monthly discussions may be brief, more thorough discussions should occur at least quarterly.

An employee commented to me about her leader by stating when they do annual reviews she always hears information her leader has previously shared throughout the year. “My leader always says there should be no surprises during the review and there never are because he communicates so well and often with me. He says we can contact him anytime and he holds true to this.”

The revised annual review process takes the form as an active, two-way dialogue of coaching and mentoring; instead of one-way discussion. This improves engagement between leaders and employees whereby leaders can provide guidance and more timely feedback. As the employee stated about her leader, this type of communication should occur frequently between employees and leaders.

A recent study indicated Millennials prefer more autonomy (72 percent), so timely feedback can help modify and enhance themselves to be more efficient and productive. In addition, 79 percent of Millennials state they prefer their leader to serve as a coach or mentor, and the revised style of reviews allows this to naturally occur if the leader is investing time to properly provide constructive feedback to employees.

High on the list identified as a “most valued benefit” for employees is recognition for a job well done as this deepens engagement and employer loyalty; while also aligning employees with the organizational mission and values. Recognition from a direct leader is preferred; although it is priceless when coming from a CEO who employees respect and admire.

Organizations excelling at frequent leader-employee interactions vs. annual reviews, and leader-CEO recognition; create much higher retention rates – as high as 75 percent after five years for employees hired out of college.

A few months ago I saw a newly created senior leadership position which was very unique as it included about five different skill-sets. The summary stressed the position was really about strong and inspirational leadership – the proven ability to communicate, coach and lead others. This is one aspect of the adapted review process if done well by leaders.

In conclusion, strong leaders should openly and regularly communicate, be transparent, coach and mentor, and recognize their employees. Frankly, we should always all do this with each other.

David Yeghiaian is committed to inspiring others through faith and leadership. Reach him at david@unique-solutionsinc.com.

HTMLgraphic Designs