If you would like Your Company to realize Peak Performance, Eliminate Annual Performance Reviews

It continues to amaze me how slow companies are to understand that annual performance reviews belong to the past. browsing this aged and somewhat static process has been largely recognized by employees and managers as a painful, biased and "rigged" endeavor. Managers often have incentives to inflate or deflate appraisals to satisfy certain metrics. Even accurate feedback can feel biased and unfair. Organizations don't distinguish between good evaluators and bad ones. A 2013 study by Kansas State University summarizes this best: "Our study finds that basically every single person hates performance reviews." I'm not revealing anything new by saying that we sleep in a really dynamic environment where constant change is that the norm. Systematic and shut monitoring of competitive activity, also as economic and geopolitical issues, requires ongoing changes in business goals. Employees' individual objectives got to be adjusted also , but this process can conflict with the annual set of goals that are measured within the traditional, static annual performance review.

 

Millennials demand real-time feedback in everything they are doing

 

In addition, millennials now have passed generation X because the largest share of the American workforce, with 18-34 year-olds accounting for roughly a 3rd of all employees. This group overwhelmingly is posing for more frequent feedback in how they're doing. Not annual, not bi-annual. they do not want to feel "in the dark" for eleven months or maybe five months. Nearly 85% of millennials during a recent TriNet survey said they might feel more confident if they might have more frequent conversations with their managers, a minimum of bi-monthly (and sometimes more frequently - yes, see you next week!!). The more often you sign up , the more fluid, authentic and effective those conversations will become.

 

Nearly 10% of Fortune 500 companies have started the revolution

 

Now, let's acknowledge that several companies (around 30 large corporations) have already realized and brought the step to eliminate the annual performance review and replace it with ongoing performance feedback loops enabled by new technology and more informal, higher quality, timely, efficient and effective conversations between managers and teams. IBM, GE, Microsoft, Adobe, SAP, KPMG and Cargill, among others, have taken this critical step and are enjoying the advantages of this necessary change. In fact, IBM turned to its 380,000 employees to crowdsource the method through its internal social media platform, leading to over 75,000 views and a couple of ,000 comments and proposals that overwhelmingly asked to eliminate the stack ranking process. Furthermore, employees wanted more frequent feedback, flexibility and skill to vary their goals because the year progressed. This shift generates an enormous sigh of relief and a rise in employee engagement and retention.

 

Another company that recently changed the old-school process is Accenture. As of September 2015, 330,000 people are browsing this "massive revolution" in Accenture's internal operations. The company's CEO Pierre Nanterme stated, "All this terminology of rankings - forcing rankings along some distribution curve or whatever - we're through with that, we're getting to evaluate you in your role, not vis à vis somebody else who might add Washington, who might add Bangalore. It's irrelevant. It should be about you."

 

Science also supports the elimination of those misleading, cumbersome and sophisticated performance management systems. within the context of neuroscience research, the labeling of individuals with a simplistic and biased numerical ratings automatically generates an awesome "fight or flight" response that impairs logic , almost like an imminent physical threat, sort of a confrontation with a wild animal. It works against the type of thoughtful, reflective dialogue you would like managers and their teams to possess in order that they can learn and improve.

 

As a private example, a few years ago, under a 1-5 scoring system , 5 being the very best , I had a manager that gave me 5s in every single main category and sub-category of the shape . And it had been not a brief form. The message i actually got out of that have was that there was no thought, no meaningful recommendation and consequently no improvement, in other words, the other of what you'd expect from a 5 rating. My reaction: negative!! More recently, an in depth friend of mine shared his experience of receiving a 4 under an equivalent scale but with the manager's recognition that he had done everything superbly. His reaction: negative!! The manager's answer: "We never give 5s to anyone, because then they'll don't have anything to strive for, or they'll just invite more raises." So, I'm sure we all have many stories like this and evidence that this is often a broken "rear view mirror process" that has got to go.

 

Technology makes it easier to eliminate the annual performance review. What are you waiting for?

 

Technology is out there now to enable faster adoption of latest appraisal and more frequent feedback systems. So, why aren't more leaders jumping on this change? can we need more attrition to happen before we take action? Performance management may be a real-time process, flexible, proactive, constructive, transparent, collaborative, positive and growth oriented. As a pacesetter in your organization, don't accept the age-old response, "But we've always done it that way!" Take the lead, eliminate the annual performance review. Great leaders know that frequent communication with employees is critical to the collective success of a corporation . it is time to start out . albeit you do not have an instantaneous solution, or a performance tracking app or a revamped scoring system , I bet you'll be ready to improve your overall team's performance just by eliminating once-and-for-all the dreaded annual performance review process.