Why Year-End Employee Reviews are Becoming Obsolete

March 17, 2016 Nicole Klemp

employee reviews

Most working people have had to go through a performance review (or several) at some point in their career. If we took a poll of those people, my guess is that most of them would say they don’t enjoy — or even dread — the performance review process. The subject of what was once a standard talent management practice is starting to lose favor with many notable companies. It seems that across the board, employees don’t like these reviews, and managers don’t particularly like doing them.

To many workers, performance reviews — which are traditionally done annually or semiannually — feel more like an evaluation than an opportunity for constructive conversation. By sitting with an employee once or twice a year to discuss performance rather than giving frequent real-time feedback, employees will be less engaged in their work and less likely to improve their performance. In fact, researchers from Kansas State University, Eastern Kentucky University, and Texas A&M found that rather than motivating employees, negative feedback during annual performance reviews actually has the opposite effect. The research also showed that many employees even tend to misconstrue the positive feedback they receive.

Bite-sized goals and open-ended communication for the win

Rather than looking back over the course of a year to evaluate how employees performed, managers should instead focus on helping employees develop throughout the year. Managers should set regular, smaller-scale goals for employees, and provide them with regular training and feedback. Think about a person who is trying to lose weight and enlists the help of a weightloss coach to help them meet their goals. Imagine that in January the coach gives them a goal to lose 40 pounds by August, at which time they’ll reconvene and evaluate their progress. Unless that person is extremely self-motivated, the chances that they’ll meet their goal is pretty slim (no pun intended). Now if that coach instead meets with them weekly and gives them regular feedback and a goal of one pound each week, they’re much more likely to stay on track.

Even when done regularly, employee evaluations alone don’t allow managers to identify issues before they become problems, and they don’t paint a complete picture of the overall Worker Experience. Luckily, there are solutions that give organizations access to employee feedback in real time, and can be a more effective tool for performance evaluation. The Medallia platform uses frequent, anonymous “pulse checks” to give HR and management a better understanding of team dynamics and areas that employees believe need improvement. This focus on trends and unfiltered feedback leads to useful dialogue between managers and their direct reports, and can improve employee morale and increase engagement.

Add a social element to performance evaluation

Cornerstone also offers solutions that enable managers to align employee activities with company goals and monitor performance with regular feedback and training. Along with traditional reviews and goals, Cornerstone Performance adds a social feedback element to make the review process continuous and more engaging. The intuitive application also allows managers to have a complete view of employee progress, and allows them to identify employee strengths, as well as areas where additional training may be needed.

Evaluating employees doesn’t have to be solely the job of management. By using social platforms and tools like gamification, employees can showcase their performance and get motivation from peers. At Appirio, employees are given the opportunity to recognize peers with a thank you badge and points for the company store. Not only is this a great motivator for employees, but since the awards are visible on Salesforce Chatter, management can see when individuals on their teams are recognized.

Every organization is different when it comes to what method or combination of methods will work best when it comes to evaluating employee performance. But whatever process your company uses, be sure that it is making a positive impact on employees — not discouraging them. And if you do decide to stick with annual performance reviews, be sure to incorporate regular feedback and open communication between managers and employees throughout the year. That way, employees can go into year-end reviews with a more positive outlook and won’t be blindsided by the feedback they receive.

To find out more about empowering and engaging your workforce, visit us at the Appirio Worker Experience Tour — coming to a city near you. And get more actionable insights and learn to boost productivity and morale across your organization from our ebook, The Future of Employee Engagement.


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