Posted by Sophie Knox on 27 February 2014
The annual performance review system is one of the most overused and often mismanaged practices in business.
Despite its positive intentions, its application can have negative impacts that go beyond sulky workers – badly executed reviews can lead to stress for those providing the feedback, resignations of good staff and underlying tensions for years. So is there a better way to review staff performance?
Do it more often, and do it less formally
One of the issues with annual performance reviews is that this formal conversation between manager and employee represents the only official window in which this important relationship is given any airtime. The reality is that issues arise weekly – even daily – for most workers, so there needs to be a forum for those issues to be expressed more regularly than once a year.
There are definitely time-pressure obstacles to making performance reviews more frequent (there’s likely to be reams of paperwork and bulky submissions to prepare), but instituting daily, monthly or even quarterly 30-minute casual meetings between managers and their staff can only be a good thing in the long run. The dynamic between manager and employee becomes more trusting and engaged, and both feel comfortable having conversations about performance in general. Important issues can be raised and dealt with in a more timely fashion, and less build-up of tension occurs around the annual performance review period.
Don’t use the annual review as a disciplinary tool
It’s not uncommon for workers to sit down at an annual review and be scolded over unsatisfactory performance that occurred months ago. Annual performance reviews are not the place to deliver feedback about singular incidents. This is the forum for a worker to receive general feedback, guidance and advice about their role, ways to improve and succession plans. It’s cowardly to hide behind performance reviews just to raise underperformance issues. Deal with these issues separately.
Support the institution of well-designed reviews
Performance review systems in big companies can often be poorly designed, over-engineered appraisal procedures that cause resentment among those who deliver them and those who receive them. Lobby to make the procedure simpler so employees are not demotivated or disengaged. As the imperative to increase efficiency grows, corporate leaders will come to understand that the relationship between managers and their staff is critical to achieving higher productivity.
Learn better communication skills
Not all managers are capable of listening and delivering productive feedback. Many lack the skills to identify problem areas, set expectations and provide constructive feedback to solve issues. A well-designed review system will include a session for managers to learn how to deliver constructive feedback and successful performance reviews. Too many badly managed staff issues result in the need for dreaded “performance management”, where managers cover their bases with a documented process in case they need to front the industrial relations tribunal for unfair dismissal.
The most important thing to remember is to keep the dialogue open between manager and direct report. Like all relationships, the worst thing for all involved is to sweep issues under the proverbial carpet then raise them aggressively at a later point when resentment has risen to boiling point.