Why Ditching Annual Reviews Isn't Enough

You've heard the news – annual performance reviews are no more! Or, at the very least, they need to be reimagined, considering that 30 percent of them actually damage employee performance instead of improving it.

Many companies, seeing that performance reviews aren't actually working the way we hoped, are now turning toward ongoing feedback, regular check-ins, and other real-time performance management techniques.

As a manager, this should make you happy. No more cramming all your feedback into the last month of the year! Now, you can pop into an employee's office on your way to the break room to go over concerns as they arise. Sounds like a pretty solid solution, right?

Well, not so much.

Getting rid of the dreaded annual review isn't the solution – it's really the first step in the total renovation of the review process as a whole. The idea of performance reviews may be to measure and manage performance, but many obstacles currently stand in the way of truly grasping how an employee is performing.

Instead of focusing on the performance review, it's time to change your view of performance itself. Many of us see the review as a problem, but what really needs re-evaluating is the way we approach and analyze performance. The real problem may not be the meeting, but forcing managers to try to remember all of an employee's work over the last year. Maybe the problem is employees feel they don't have enough time to explain themselves or ask questions. This may very well be the case, given that 54 percent of employees see reviews as inaccurate and 76 percent say they don't feel heard during reviews.

Look at the Bigger Picture

Instead of stopping at the performance review, change your understanding of performance itself. Pay attention to the outcomes of an individual's work and compare them to the performance of the department as a whole.

An employee's performance can be heavily affected by the way their department works. For example, one employee might be doing very well performance-wise, working hard and hitting as many goals as they can, while the department itself struggles, holding them back from real progress. On the other hand, just because an employee seems to be doing their duties, that doesn't mean their department is thriving.

Consider centering your review measures around the stakeholders. How does the employee interact with their stakeholders and what type of value do they provide them? Aligning employee goals with the overarching company goals allows for workers to see how their daily tasks affect the bottom line and also show management the real value of the workforce they employ.

Enforcing the aforementioned measures is key way to creating a review process that truly tracks employee performance. All managers should strive to know exactly how their employees are performing and to provide accurate, relevant feedback that helps them perform even better.

A version of this article originally appeared on the iRevü blog.

Michael Heller is the CEO and founder of iRevü.