Time to Scrap the Annual Performance Review?

Everyone in your organization loves to give and receive annual performance appraisals, right? I thought not. The fact is that many of us would grade our annual performance evaluation systems as “unsatisfactory.” In response, there is a growing trend in the corporate world to eliminate the annual performance appraisal altogether in favor of a different approach. Even if your annual performance review system works well, these new approaches offer performance coaching techniques that could enhance the value of your review.

We all know the litany of complaints about the annual performance appraisal process. Foremost among them is that the whole process takes valuable time away from the actual work of getting things done; do these appraisals deliver value commensurate to the time required to complete them? Too often, the reviews focus on only the most recent accomplishments, sidestep uncomfortable performance issues, or devolve into an exercise in getting to the threshold rating point level to justify a merit pay raise or benefit. And the whole process causes stress and anxiety for both the supervisor and the staff person being evaluated.

Companies as diverse as General Electric, Accenture, and Netflix have moved from the annual performance appraisal to a more dynamic approach to giving feedback. Rather than scrapping reviews altogether, they are doing them more frequently. They are finding that giving consistent, timely, honest feedback throughout the year is more effective at driving performance than the annual review.

Part of this push may be a recognition that there’s a new generation of staff who want more frequent feedback to spur learning and growth. A recent survey by Trinet and Wakefield Research found that 74% of millennials said they feel "in the dark" about how their managers and peers think they’re performing. But this isn’t just a millennial phenomenon. We all want and crave feedback, especially if we’re launching into a new career and want to start out on the right path.

So what does more frequent feedback look like from the standpoint of a performance appraisal? At MRSC, we’ve gone to Quarterly Performance Conversations instead of annual reviews. The documentation of the quarterly conversation is far simpler and takes  just a few minutes to fill out. The goal is to get managers in the habit of giving more consistent, timely feedback, and, just as important, to receive feedback as well.  The idea of a conversation is that it is less formal, and more frank. Because it’s quarterly, this system also gives teams and managers an early warning signal if goals are not being met, and the flexibility to adjust and add new goals throughout the year.

Pinellas County, Florida, a large, urban county government with 3,000 employees has made the transition away from the annual performance appraisal. Their program is called FACE of Performance, for Feedback, Ask Questions, Conversation, Explore Options. The components of the FACE program are:

• Ongoing Feedback and Coaching
• Set Expectations
• Support Growth and Development
• Observe and Note Performance
• Summarize Performance Conversations

The county has a robust training program to support each of the components. Training and support is a key component of whatever performance appraisal system that you adopt.

Some managers are naturally gifted at giving feedback, others need more practice. A first step may be to encourage managers to incorporate intentional conversations about performance into their weekly one-on-one meetings with their employees. To begin the discussion, frame feedback in terms of a “stop, start, and continue”. What is the employee doing now that is not working? What are they doing that is working well? What actions should they take to be even more effective?

Our experience with quarterly performance conversations at MRSC has been that the level of trust has grown and the conversations have gotten easier over time. Not every conversation is extremely fruitful, but because they are happening more often, there is a much greater chance of hitting the sweet spot. And with practice, we all get better at giving and receiving feedback.

Resources:

• MRSC Quarterly Conversation Review Sheet

Has your organization tried to improve your performance review system recently? Share your experiences in the comments below or email me directly at tburrows@mrsc.org.