What To Expect From Performance Reviews In The New Year?

2017 has just begun! The New Year has brought happiness, hope and a fresh start for everyone. Being an HR professional, you can mark a new beginning by replacing annual performance reviews with continuous ongoing performance feedback.

According to SHRM, 90 percent of performance reviews are ineffective and painful. Multinational companies, like IBM, Accenture, SAP and more, are doing away with annual employee appraisals due to the inefficiencies related to the process. Annual employee reviews add little value to employee performance outcome and aren't much helpful in boosting engagement either. Hence managers and employees dislike them equally. 

Annual performance reviews are less productive due to following reasons:

•    Reviews take place only once a year
•    Traditional rating scales are demotivating
•    Managers do not maintain year-long performance records
•    Performance feedback is provided at the end of the year only
•    There is a lack of feedback from multiple sources – i.e all the people the employee may have worked for or with in the year
•    Annual reviews are closely tied with compensation and promotions
•    Managers typically don’t get to review employee goals & achievements throughout the year

Employers need to revamp employee performance appraisals to make them more meaningful and effective. While the appraisal workflow varies from organization to organization and may involve different stakeholders (depending on the size and type of a company), improving the employees’ performance and engagement remains as the universal goal for conducting reviews. 

Here are some tips for managers and HR to make performance reviews more effective – 

Set up clear and measurable goals and review them periodically

Start the new year by setting clearly defined,measurable employee goals.  Goals need to be mutually agreed between the manager and employee.  The goals set should be specific with clear expectations. Managers need to constantly monitor achievements and review the goals to keep them aligned with the organizational objectives.

Focus more on providing performance feedback from multiple sources

Ensure that employees receive regular performance feedback. Once a year feedback does more harm than good, and absence of ongoing feedback makes it more difficult for employees to take corrective steps in improving their performance. Managers should acquire tools and expertise to track performance of employees regularly and share real-time feedback with them. 

Performance reviews can be made more meaningful for team members, if feedback is not based on perspective of just one person. Feedback from multiple sources gives a holistic view on the employee’s performance and helps manager and HR in giving accurate feedback to the employee.

If HR and managers continuously put efforts in improving performance reviews, they can build a highly productive and motivated workforce. A well-structured employee performance review can help achieve an organization’s objectives, enhance employee-manager communication and retention of top talent – proving it to be a boon for better business outcomes.