Business Communication and Character

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Overreliance on Annual Performance Reviews

Before and during the pandemic, several companies stopped doing annual employee reviews, but many have brought back the practice. Reports show that slowed hiring and increased layoffs are causing more pressure for employees to perform; managers want more ways to track and document performance. Without reviews, managers could appear to have lax standards, failing to hold employees accountable for outcomes.

The annual documentation, meeting, and goal-setting are not the real problems. Managers are uncomfortable giving feedback and rely only on once-a-year conversations. Employees need to know, ongoing, how their performance measures up to expectations so they have a chance to improve. When done well, annual reviews are a summary of what employees already know about where they stand. Ongoing feedback encourages self-accountability, holding oneself accountable without relying on external approval.

A Bloomberg Businessweek article (with simplistic, nonparallel charts) offers alternatives to the annual review, which could supplement the annual meeting. The recommendations are in line with good business communication: check in regularly, encourage the employee to reflect, focus on the future instead of the past, collect multiple opinions, etc.