2016 might be remembered as the year we heard the death rattle of the traditional annual performance review. As those of us in the HR space know, there’s been a revolution brewing for a while, with companies like Deloitte, Microsoft, Adobe, and Accenture doing away with their review systems well before 2016 in some cases.
"We’re done with the famous annual performance review, where once a year I’m going to share with you what I think about you, that doesn’t make any sense." Accenture CEO Pierre Nanterme told the Washington Post in 2015.
In many companies there’s been a huge void left by banishing the annual review to the ends of the earth. After celebrating for a few months, employees are left thinking: “.... but oh wait, now I have no idea how I’m performing” – high performers no longer get positive reinforcement and lower performers do not know where they stand. This is particularly a problem with feedback craving millennials, such as myself!
But what replaces the chasm left in place of the Annual Review?
In June, General Electric announced a major shift in its review process. Like the others, GE ended the rigid annual review and turned to a mobile app to collect feedback. One difference really stood out in GE's approach, however: the company traded the annual employee-manager review session for a series of frequent check-in meetings to fill the chasm.
So why may turning to frequent, lightly documented performance check-ins be the answer to a better review process? Because they defeat some of the biggest problems associated with annual reviews while filling the void left, with meaningful growth-minded conversations:
Recency bias: Where managers judge an employee’s performance based on something they did - or didn’t do - within a few weeks or months of the review rather than looking back at a whole year of activity. Frequent check-ins that include a light documentation element, help focus performance assessment.
Siloed data: We store evidence about performance in a variety of different places, so it’s a challenge keeping track of all that evidence and using it effectively during review time - Deloitte noted that it was spending 2 million man hours on performance reviews each year, and you can bet a lot of that was spent on gathering paperwork. During check-ins, managers and employees can make quick notes on performance objectives which can be used when compensation decisions need to happen.
Lack of transparency: In the traditional review framework, projects and tasks can get swept under the rug or shrugged off - managers don’t have the ability to set expectations in real-time.
No coaching or real-time feedback: This is the biggest one. Under the old system, managers and employees don't work on performance in real-time. If there are ongoing performance issues, frequent check-ins could be used to work on issues as they occur. As a 2015 HBR article noted regular 1:1’s may even increase productivity in general.
For some organizations, a weekly one-on-one with a performance component might sound like too much, but if employees view the weekly one-on-ones as an investment in coaching - like looking at a golf scorecard as you play rather than waiting until the end of the round to fill it out - they may just decide to join the revolution.
For HR practitioners, leading the frontier on changes like this may seem daunting – but at the end of the day, the more transparency and coaching and the less bias within an organization, the better and more healthy the organization will be!