The Cure for the Annual Performance Review

Every year, there is at least one book and a spate of articles about the evils of annual

Annual performance reviews: What's NOT to love.     Image by © Royalty-Free/Corbis

Annual performance reviews: What’s NOT to love. Image by © Royalty-Free/Corbis

performance reviews. Basically it’s the same theme – Toss the reviews! Ban the process! These writers think performance reviews shouldn’t exist. They say managers hate them because they are a time suck in taking forever to prepare. The process is stressful and everyone’s jumpy around the time of annual performance reviews. And, they don’t work as they cannot see a connection between the employees’ actual performance and any motivation the review process is supposed to provide. Employees don’t trust them because they aren’t sure the manager is going to remember correctly what they did, the goals from the last year have changed so much they are not sure what they are being measured on and they’re often compared against other employees instead of their own improvement. And I have to say, annual performance reviews—although a good deal better than no reviews—don’t really work. I mean, let’s face it, in how many endeavors of our lives can we succeed when we don’t find out until the end of year how we’re doing? What you measure you can manage and that’s just too long between measurements.

But if you’re going to get rid of performance reviews, you have to replace them with something better, which means ongoing communication with employees. Maybe you have a short review once a quarter. Maybe once a month. How about weekly check-ins with each of your employees, a one on one for 30 minutes with each employee to talk about status of work and a chance to give specific feedback? In fact, some organization building the time after each project is completed to review the team and each member’s contribution to its success or failure.

Many companies have embraced some form of continuous improvement inspired by LEAN manufacturing methodology which makes tremendous sense. If you want your products and services to continue to improve, your people need feedback about how well they’re contributing to that goal. This isn’t just for the company’s profit, it’s also because growth is one of the things top candidates most desire. If you’re not helping them figure out how to grow in their roles and potentially move up to roles with more responsibility and control, you’re probably going to lose your best people.
But giving thoughtful, useful feedback takes time. It has to be something that’s scheduled into the day as a key business objective. There has to be time to actually think through and record what each person’s role was supposed to be and how they contributed: Were they more helpful than required, making sure other team members were supported? Did they offer really creative and useful solutions? Did they go the extra step to make sure the customer/client was happy? Or did they hang back and let others do most of the work, only showing up for the part they knew they’d be graded on? If a manager’s feedback isn’t specific and accurate, neither will the improvement be. And that’s one of the big problems with annual performance reviews. Who knows or cares what you did six months ago when there’s another deadline looming?

Thoughtful management of people takes time. It’s not just about chucking out an “atta-girl” or making a passive-aggressive statement to express your annoyance. Leaders have to value the time managers contribute to guiding employers so that managers understand this is a key part of their job. Two-way communication that gives enough time to understand what needs to be done better, or what’s being done well, must be a habit within everyone’s work day.

So, go ahead and deep-six the annual performance review. Just don’t forget what creates great performance and be willing to invest the time to support it.

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at or call (512) 420-8267



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