Blog post

Work has changed. Why hasn’t your employee review system? 

Employees are having a bad time. Inflation is rocketing, wages are stagnant, and every penny they earn is spoken for. The last thing they want is to sit down and do an annual performance review.

Let’s be honest, who can blame them?

The annual review needs an upgrade traditional performance reviews date back to the early 1900s, with the US military merit-based rating system influencing the process many organisations still use today.

Since then, humans have marched across the moon, invented the world wide web, created driverless cars, and given jobs to robots. Hardly the same world, is it?

If you’re hanging onto the annual performance review process, it’s time to ask yourself why. Is it helping you and your people take action on business goals? Or is it a broken system that you haven’t made time to fix?

Work has changed so much that reviewing people annually is all but redundant.

It’s time for something different.

 

The problem with annual performance reviews

Annual performance reviews are a way for leaders to assess employee contributions to the business, and provide actionable feedback to help improve performance.

In theory, it’s an excellent idea. Sitting your people down, asking them questions about their work, role, and experience of the job. Providing constructive criticism and praising their best efforts. Setting SMART goals and building a path to even better performance. Sounds like a worthy investment, right?

 

What happens in a performance appraisal isn’t necessarily the problem. It’s how those appraisals happen, why they happen, and when they happen that’s causing friction.

For starters, once a year simply isn’t enough.

If we were to apply the annual performance review to the start-up world – where most start-ups fail within a year, that means employees wouldn’t get a single performance review.

And as more businesses make use of freelance and contract talent during tough times, teams are changing shape at a rapid pace. Businesses are becoming more project-orientated, as traditional business departments cross-pollinate and collaborate.

 

Can we go a year without structured feedback and career guidance?

The world of work moves much faster now; new technology inspires new systems and processes regularly, with software updates forcing real-world updates in the workplace. So it’s no surprise that more than a third of workers want more regular feedback from their bosses.

The bottom line is, there has to be some kind of review system in place. It keeps people accountable and reminds us of how far we’ve come, which is incredible for morale. But the current format has to change.

 

What we should be doing instead

According to research from Gallup, when managers provide weekly feedback, team members are more than twice as likely to be engaged at work. Reviewing more frequently is a no-brainer.  

That doesn’t mean you have to replicate the annual review every month – it wouldn’t be the best use of your time anyway.

Instead, focus on creating systems where feedback is delivered continually. Whether it’s adding a feedback stage to your projects, or earmarking time in your monthly meetings to talk about progress. This feedback should be focused on individual goals and projects, so your team can take an iterative approach to work (and make little improvements at regular intervals!)

It’s also time to question the content of performance reviews. All organisations should be using this time to address the things that matter most to their people, as well as their business. For example, are your employees able to spend enough time with family and friends without work taking over? Are they healthy, mentally and physically? Do they find their work fulfilling?

As remote work becomes the mainstream, use the time in your performance reviews to focus on their work style and environment. Whether you’re a full-time office team, hybrid gang, or distributed team of digital nomads, we can all benefit from understanding our colleagues’ work styles better.

The most important thing to determine is whether your set-up is conducive to your employees and your business’ success. If it isn’t – and it’s within your power to change things – make sure you offer your people an alternative way of working.

If you can’t offer your people more money to help them weather the cost of living storm, at least look at ways you can make the time they spend working more enjoyable. A core hours policy shows empathy towards the unique lifestyles of your employees, even if it isn’t a full-blown remote-work policy.

With a regular feedback loop in place, your annual performance reviews can become so much more. A chance to talk about the things that fire your people up, the future of the business and their role within it, and all the things they can look forward to in the year ahead. Who wouldn’t want that?

 

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Work has changed. Why hasn’t your employee review system?  was last modified: November 24th, 2022 by Beatriz Araujo

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