Is it Time to Kick Performance Appraisals to the Curb?
What?! How can a compensation expert of over 20 years suggest dismissing a tried and true “have to use” tool she has espoused for decades? There has been a lot of attention given to the trend of dumping traditional annual performance reviews amongst many large corporations, like Fed Ex, Cisco, Gap, Adobe, and Deloitte, to name a few. What do they know that you don’t? What should you consider as you do your salary planning for next year?
What do Annual Reviews Net You?
As with all business activities, you should be looking at the return on investment. In this case, the time spent, including writing and HR tracking past due reviews, versus the value for the supervisor and employee—and let’s not forget all the angst giving and receiving appraisals. The benefit of giving performance feedback suddenly gets lost and it may be time to shift your thinking.
Before you go celebrating your new-found freedom in a life post-reviews, there are two things to own and implement for this idea to work well:
Feedback Process - Continual coaching must be provided to employees so they know what they are doing well and how they need to improve their job performance. Ideally every manager should meet with his/her direct reports on a weekly basis for these “check-in” meetings. Assuming this sort of continual conversation, each meeting does not need to last very long. Research supports the continual coaching model: employees want continual feedback rather than waiting for an annual review when corrective action may be too late. With an engaged employee receiving continual feedback employee retention will increase.
Tracking Interactions - Documentation of these coaching meetings needs to be made on a regular basis to create the paper trail we have relied upon with annual reviews. If an employee needs to be let go for poor performance or other reasons, the documentation still needs to be in place to support the decision to end employment.
Bottom-line of Performance Reviews
Great performance management includes continual coaching with or without written annual reviews. If your organization is not providing this kind of continual feedback to your employees, it’s time to start. Once you do, you will see increased employee and organization performance.
Track Performance with Compensation
Tune up your compensation planning with new thinking and insights that match your shift in performance reviews. Contact me to get your 2018 planning off to a new level of effectiveness.