Should you ditch annual performance reviews?

Should you ditch annual performance reviews?

Should you ditch annual performance reviews? The awkward annual sitdown between worker and boss to discuss how they’ve performed over the past year is going out the window at many leading companies, as they shift to giving staff continuous feedback year-round.

Microsoft, Deloitte, IBM, Dell and Abode, are among the global firms that have ditched yearly performance reviews to more regular check-ins between employee and manager.

Stuart Hearn, chief executive of Clear Review, expects increasing numbers of companies to make a similar shift, saying it’s “futile” for employers to cling to old-fashioned performance management processes.

Research shows 65 percent of workers feel they don’t get enough feedback – and keeping it timely helps them perform to a high standard, Hearn says.

“With the growing need of continuous feedback and all the advantages real-time feedback has to offer, continuous performance management will likely take over as the norm. There will be less reliance on the yearly appraisal as a means of assessing performance, and performance discussions will become a regular, everyday aspect of work,” he says.

But the annual review isn’t dead yet: Hearn says some companies – including those that “value tradition or fear change” – will be wary of the impact of such a major organizational change, while others perhaps aren’t keeping up with HR trends.

Others may find it easier to award bonuses when they’re linked to annual appraisals, though companies like Microsoft and General Electric have adopted pay review processes based on managers’ insights from their staff check-ins and feedback throughout the year.

Hearn believes performance reviews will become much more collaborative, with the employee taking a more active role.

“When it comes to goal setting during performance reviews, employees will be given more of a say in their objectives, which we now know to be ideal, as when we allocate our own goals, we are much more likely to achieve them. In essence, the whole process will be more agile and more empowering for the employee.”


Related stories:
More men cry after appraisals than women
The big problem with performance ratings


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