Annual Reviews are Yucky

“Thanks for working an entire year. Here’s a completed form filled with everything I like and dislike about you. Enjoy your day.” Yeah, annual performance reviews aren’t usually that blunt, but they sometimes feel like that.

Now is the time to develop a new method to evaluate performance due to the way business is conducted, changes in society, and expectations on both sides of an annual review.

There are probably a few reading this article believing annual reviews still work. I won’t disagree because annual reviews do work for some organizations. Here are the top reasons I believe annual reviews have become less effective.

• Poorly Trained Reviewer: Too many managers rely on their experience as a reviewee. While there is some education in doing, it’s not the same as formal instruction from an HR professional. Sadly, too many human resource managers assume every boss knows how to conduct a review.
• Lacks Timeliness: It’s a once-a-year assessment. Some managers take notes throughout the year, but most don’t. They struggle to remember anything beyond the most recent activities.
• Induces Stress and Anxiety: Many employees feel a review is a pass/fail test. Because pay increases are connected to annual reviews, employees worry the results will harm their income, job, and career.
• Forms are Impersonal: Plain, white paper, bland font, black ink. It might be a copy of a copy that’s so blurry it looks like a Rorschach test. Do you feel special or more like your work has been folded, spindled, and mutilated when handed the form?
• Grading Systems Suck: It could be a numbered ranking system, stars like movie ratings, or the ever-popular “G-A-NI” (good, acceptable, needs improvement). Most managers grade first then write the narrative to fit the grade, which is backwards. Most employees focus on the negative ratings to defend themselves.
• Narratives Feel Like a Personal Attack: Not every manager writes well. Not every employee takes criticism well. Either scenario is bad. The two combined could result in hurt feeling, resentment, or a good employee quitting for another job.
• Post-review Mood: It’s all unicorns and rainbows when the review goes smoothly. A disappointing review, whether you’re the manager or employee, usually sours the rest of the day, maybe even the work week. Bad attitudes are like crafting glitter – sticks around and difficult to remove.

The more constructive approach to reviewing performance is to follow the “Always Be Coaching” rule. Here’s are a few benefits that stand out:

• Increases Personal Engagement: Interaction builds and strengthens relationships. This improves teamwork, enhances trust, and improves retention for management and staff. Some call this “management by walking around.”
• Immediately Recognize Accomplishments: Instant results (gratification) are expected today. Giving praise, right then and there, demonstrates you’re paying attention to your staff. An employee will appreciate the spontaneous recognition.
• Chance to Teach: Coaching is a proactive management style. Guide your employee as opportunities arise. It’s demonstrating commitment to the employee by showing solutions, where to find answers, or how the “magic” works. Employees will recognize their boss took time to help them learn new skills.
• Improved Performance: Employees will feel good about doing more because their boss recognizes their work or teaches when needed. The regular interaction builds loyalty from both sides, too.

Documenting employee actions is a necessary thing. One of my big pet peeves is only documenting what’s considered “significant interaction with staff.” This usually means only make a record when an employee is late, has poor work quality, or does other bad actions. That’s just half the story. Be equally proactive to document the employees’ good actions.

Several years ago, I created the ‘Pat on the Back’ prize. It was a hand-shaped piece of paper attached to a bag of candy or snack. There was space for me to write the employee’s name and what they had done to earn a pat on the back. Goofy? Absolutely! Effective? More or less. Over half the staff like getting the mini award. A few tacked their slips to their cubical wall. This fun approach allowed me to instantly recognize good work, made the HR director happy with documentation, and was a good boost to employee morale.

Quarterly updates are a good way to A-B-C. It has similar, positive impact as on-the-spot recognition. This scenario balances a casual conversation with a structured session without the weighty feel of an annual review.

There is no escaping the connection between merit increases and annual reviews since it’s imbedded in too many corporate cultures. The escape route would be changing the pay policy to allow pay adjustments throughout the year.

When annual reviews are required, I’ve asked the employee to write a self-review. This makes them think about their performance and involves them in the review process. Helps them to understand my point of view, and majority agreed with my assessment. Yes, there were a few times I adjusted my review based on their comments. Very few employees chose not to write a self-review. Not much of a surprise to say the ones who skipped writing their own review tended to be average performers.

Whichever method your company uses for performance reviews, make the time to do them honestly with care and consideration. Employees are one of your biggest assets. Take care of your staff and they will take care of your business.