Insight Performance

The Death of the Annual Performance Review

Written by Andrew Aston on 21 Oct 2020

Annual performance reviews – three words that either send shivers of fear and loathing down the spines of employees’ and HR professionals alike, or cause great excitement among the few admin-enthusiasts among us.

After years of exposure to unwieldy and inefficient performance appraisal and goal-setting processes, a low-level dread seems to set in during the run-up to these reviews. They also generally result in much time being taken out of managers and employees’ days, representing a significant cost to the business.

Recently, a shift in the mindset surrounding performance has started to take hold and gather momentum, possibly a latent acknowledgement to the fact that processes designed in the 80s, 90s and 2000s simply aren’t compatible with modern-world technologies and time constraints.

Implementing an ongoing, fluid and effective performance review process is the way of the future, with a vast majority of HR professionals and organizations recognising this and acting accordingly.

Below we’re going to take a look at three key reasons why this continuous performance model is rapidly replacing the annual performance review, and how it can benefit your organization.

1. No Surprises

Annual performance reviews have the ability to throw up surprises for HR professionals, whether that be an employee abruptly voicing their unhappiness, or revealing an overachiever who’s gone all year without recognition.

This leads to a scramble to correct these findings, resulting in an inconsistent and emotionally-draining process that leaves more questions than answers.

With a continuous performance process, where conversations, catch-ups and check-ins are scheduled at regular intervals throughout the year (e.g. once a month), these surprises and revelations are uncovered early on.

The knock-on effect of this is that negative behaviours and patterns are able to be nipped in the bud early, and positive behaviors and patterns are able to be reinforced, allowing for performance to remain on track and a level of consistency to be applied to the process, especially around areas of improvement.

2. Increased Engagement

Employee engagement is increasingly at the vanguard of modern HR practices, with companies of all shapes and sizes desperate to improve and refine employees’ engagement with their culture and way of working.

One way of doing this is making sure employees feel heard, and under a continuous performance model, there are constant and regular chances for employees to make themselves heard and facilitate conversations.

The result is increased engagement and a vital relationship of trust throughout the performance appraisal process. This trust is something often missing from annual performance reviews, which usually result in a year of pent-up frustration being released at once, something that is neither constructive nor beneficial for engagement.

3. Focus on the Future

Rather than spending hours drily reviewing and regurgitating what has been achieved and done over the previous year, as is the case in annual performance reviews, continuous performance processes turn this into a forward-looking conversation.

Being able to spend more time looking to the future and focusing on strategy is something approaching nirvana for HR professionals, as the admin and stress of organising performance reviews once a year gives way to dynamic and flexible timeframes.

Employees will appreciate the ability to help map out their future goals, and previous conversations and check-ins around performance can easily be referred back to, helping create a holistic and interconnected approach to establishing an effective performance review, and performance development.

Future goals
Easily set, track and measure employee goals in intelliHR.

Whilst some HR professionals might think that they only have time to organize performance reviews once a year, they are increasingly and inevitably swimming against the tide, as the continuous model becomes the standard, so it’s best to get on board now, and let the annual performance review rest in peace.

Want to know how you can modernize and implement a more dynamic method of tracking performance? Check out intelliHR’s powerful Performance tools.

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