Why We Said Goodbye to “The Annual Performance Review”

Most of us who work in the corporate world are well familiar with the “big annual performance review.” It’s that time to finally let your employees know where they stand, give them kudos, and how they can improve, but what if you could do this in a way that isn’t so time-consuming and enhances their performance throughout the year instead of waiting till the very end? 

Many premier companies have made the switch to a style of management called “Performance Management.” It’s a continuous process of encouraging employees to challenge themselves and set goals that raise the bar. Working with your employee, you decide together what goals and specific metrics to set, for example, increasing the number of job applicants that are successfully placed with a client by a certain percentage.

The metrics should be challenging yet attainable, and if your employee is feeling extra ambitious, they can set stretch goals that may push them past their current skill set and help them learn new ones. 

According to CFI SMART goals are the most effective way to not only attain but even exceed your performance metrics set. The framework of SMART goals ensures your goals are…

  • Specific: Well defined, clear, and unambiguous
  • Measurable: With specific criteria that measure your progress toward the accomplishment of the goal
  • Achievable: Attainable and not impossible to achieve
  • Realistic: Within reach, realistic, and relevant
  • Timely: With a clearly defined timeline, including a starting date and a target date. The purpose is to create urgency.

Is it more time-consuming?

The question you are probably asking yourself is, “Will this be taking more of my time if I have to facilitate frequent meetings throughout the year with multiple employees?” The answer may surprise you; it will actually save you time. The constant communication prevents any misunderstanding or confusion about expectations and can provide opportunities to course correct sooner rather than later, resulting in goals being met on time. The teamwork and continuous feedback also improves employee engagement, satisfaction and ultimately will help in employee retention, which is also a big win and time saver. 

Performance management may be more critical than ever for companies that are still operating a work-from-home model, especially with all the uncertainty and disruption over the past year. People typically want to hear directly from you how they are doing, where they are excelling, and what areas they can improve on. 

How do you get the most out of these regular performance meetings? 

  1. Make it a discussion; people want to collaborate and be a part of something. If the environment is more casual and laid back, you will get honest feedback and participation.
  2. Focus on the future; refrain from making the meeting too much about past successes or failures. Instead, focus on the companies’ current and future needs and the employee’s role in making them happen.

Remember, these are informal check-ins, so hold salary meetings separately. 

Most companies still have their formal annual salary performance at the end of the year separately. The performance check-ins are a positive way to stay on track, discuss strategies for change and growth and ultimately provide a healthy relationship with you and your staff and keep them motivated to do their best.

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