Traditional annual performance reviews are semi-obsolete. Changing employee demographics demand a fresh approach that has little in common with the old system.
Outdated top-down critiques involve a scheduled formal evaluation of the employee’s performance. Looking back on the past year with a focus on review and feedback is a good thing. However, it ceases to be beneficial when it’s overly time-consuming and there’s a year between each reflective exercise with little follow-up. This failure to create real value while costing too much in time and resources means the traditional performance review is on the wane.
A yearly review of past performance does not cut it with employees being asked to do their best work. To be effective, feedback needs to have a big forward-looking component. While past wins need to be recognised and honoured, employees want to get a fix on the opportunities open to them as the company grows. This means they need to have their skills evaluated in the context of holistic career development.
To optimise motivation, performance reviews should be regular, not episodic. Quarterly is one option or at the end of a project when there is fertile ground for evaluation. Rather than being an isolated event, performance reviews take place in a context of open dialogue and regular check-ins. This does not mean subjecting employees to constant and indiscriminate feedback but using your judgement to make sure feedback is high-quality and discerning.
With a focus on give and take, the modern performance review is egalitarian. A two-way conversation is more productive than a one-way employer-driven review. Employees are empowered to be proactive in the development of their careers and are encouraged to look for growth opportunities. Goal-setting becomes the responsibility of both employer and employee.
Data is collected and communicated to employees in real time rather than in a single review which, by its very nature, will be removed from the events or projects being referred to. Feedback occurs in a multi-directional flow between employers and employees and between peers. Appreciations posted by colleagues and feedback between managers and employees are stored on digital platforms so that reviews are no longer being conducted in a vacuum. Feedback becomes a valuable commodity for the review process, which means both employers and employees become invested in the feedback loop. (For more on digital feedback see Appreciation in the workplace: Why kudos matters and Boost performance reviews with peer feedback.)
While taking a fresh approach, modern performance reviews still cover key points of engagement for employees – goals and expectations, recognition and rewards. However, transparency, regular check-ins and feedback, and a focus on career development and personal growth, place them in a new habitat that fosters higher engagement and better retention.
Key takeouts for stepping your performance reviews up a gear: