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Don’t let annual reviews ruin your team’s New Year


Few employees like to be reviewed, but in the workplace feedback is a necessity. Businesses are built on performance and leaders need to drive innovation in their teams to keep up with competitors. So, how do most companies try to develop high performance workforces?

The annual review.

But no one, and we mean NO ONE—employees and employers—likes the traditional annual review. The reason? They don’t work.

Employees don’t keep a running log of everything they’ve done throughout the year, and business owners and their managers can’t keep a running log of everything their employees are doing, either.

Annual reviews are often not reflective of what an employee has actually done, which is why it’s impossible and unfair to assess their performance, let alone their compensation, on a yearly review.

The Society for Human Resource Management found that 90% of performance appraisals simply don’t work and that an extremely low percentage of employees become top performers through the practice.

In addition, psychologists A. Kluger and A. Denisi analyzed over 600 studies of performance evaluations and concluded that at least 3 out of 10 performance reviews actually decreased employee performance. This means annual reviews are not only ineffective and toxic, but worst of all—they can cost you money.

How to evolve beyond the annual review

The reality is your people truly want to know how they are doing and most importantly how they can improve. To evolve beyond the annual review, businesses need to equip themselves with the right tools at the start of the process. Here are 3 steps to opening the door to employee performance.

Focus on compiling and generating accurate, useful feedback

Performance reviews are a powerful tool when done correctly, but they need to be based on accurate information. Empower your managers with a cloud based solution that seamlessly integrates with their daily working life and allows one-click daily review capabilities via phone, mobile device, or PC. Our HR Symphony HRIS platform goes beyond this through the use of the MICRO-EVALUATIONS™ tool and daily diary-based employee evaluations for managers.

Create a formal “check-in” with direct reports on a regular basis

Managers should check-in with their employees (once a month or every quarter). This allows managers to set goals, monitor progress, and offer feedback, support, and coaching based on the data they compile throughout the year. Push your managers to focus employees on the most relevant and impactful goals, while providing them with on-going, real-time, and context-relevant feedback. Frequent check-ins also helps facilitate open communication, so that feedback given during the review is never a surprise.

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Use the annual review to summarize check-ins

Should you choose to keep the annual performance review, leverage it as a session that summarizes the monthly or quarterly check-ins. Use it to discuss what else the company can do to help employees be successful in the coming year, and allow employees to share what they can do to make the company more successful.

By enabling your performance review system with real-time tools and accurate performance data, you can amplify the effectiveness of your company, manage promotions, develop careers, and strengthen the culture of performance, communication, and trust you’ve created within your organization. By following these steps, you can transform your annual reviews into a process that celebrates the start rather than the end of a productive year.

If you have any questions about the MICRO-EVALUATIONS™ employee performance tool or any other employment issue, contact one of our helpful human resource consultants at (808) 791-4900.

This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant or adviser before acting upon any information in this article.

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