Annual performance reviews are dead – use these alternatives

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Whether you are an employer or an employee, nobody likes annual performance reviews. Fortunately, there are other techniques you can use to manage your people…

At some point in our careers, we have all been dragged into an annual appraisal with the boss. If you were lucky, you got away with a quick “well done”, but on other occasions your list of objectives was longer than the end credits of a film.

In today’s fast moving business culture, an annual performance review is not an effective way to train and develop staff. If an action point from last year is not completed, you have wasted 12 months and potentially have longer to wait for progress to be made.

In this article, I will cover some alternative ways to monitor the performance of your employees.

Regular one-to-one meetings

Never underestimate the power of a regular one-to-one meeting. Whether you hold them fortnightly or monthly, having regular contact will build the foundations of trust and a positive working relationship.

Try to keep them as informal as possible, but remember that every meeting has a purpose. For example, you might want to receive an update on a certain project or would like to discuss training and other ways to offer support. The communication should be two way, so be prepared to receive feedback and action points of your own.

Keep the mood positive and take the opportunity to praise the employee on their progress since the last meeting. Find ways to help them achieve their targets and offer tips to improve performance.

Your goal should be to show your employees that you recognise their efforts and care about their career progress. Creating a culture of open engagement and support will motivate your team, which should ultimately lead to better results for the company.

Quarterly assessments

While a regular one-to-one could be a five-minute conversation at the end of a busy day, you should also plan more structured meetings. Quarterly assessments should be firm dates in the diary when you can make a more thorough check on progress.

Employees should be expected to prepare and produce relevant data and progress reports. As a manager, you need to listen carefully in order to make informed decisions on the best way forward. How can you support the staff member? Can you remove any roadblocks?

Unlike annual performance reviews, regular communication means you shouldn’t receive any unwelcome surprises in your quarterly assessment. Whatever the outcomes of the meeting, they should be noted, shared and agreed upon in writing.

Communication culture

Fostering a communication culture within your organisation will allow you to spot any potential problems before they develop into bigger issues. Your people should feel comfortable enough to share feedback, without fear of repercussions.

Try to remember what is was like when you reported to a manager. You would want to feel like your opinion was valued and could lead to improvements in the business. The art of successful communication is to always have an open door and to be visible in the business.

Project meetings

Another technique to monitor performance is to arrange project meetings to review a specific area of the business. From sales targets to the implementation of a new company policy, a task based review is just another way to connect with your people.

Rather than being centred on personal performance, project meetings should focus on a key business objective. While there will be an element of reviewing the previous weeks or months, the aim of the meeting is to focus on reaching future objectives. Review and establish targets, and empower your employee to drive progress which will build their confidence.

Career development 

In the past, the dreaded question of career progression was always left to the end of an annual performance review. In many cases, the employer had nothing to offer, while the employee was secretly aiming to change company in the next few months.

Avoid bolting a conversation onto the end of another meeting, try to arrange a dedicated time to discuss career development. If you want to improve your staff retention, you need to have an open and honest conversation about what the future holds.

Try not to walk into the meeting empty handed, so do your homework by identifying any opportunities you can offer the employee. From improving their skills through training to offering secondments in other departments, how can you help them to reach their full potential?

Rewarding performance  

Another negative of annual performance reviews is that they are viewed by members of staff as an annual opportunity to ask for more money or a promotion. In reality, you will be unable to meet their demands which will leave them upset and demotivated.

The benefits of a communication culture is that your conversations will focus on team and individual performance, rather than pay and conditions. By closely monitoring your individual staff members, you can build in pay reviews and financial incentives based upon the success of the company or an individual department.

Whatever technique you choose to use, the important thing to remember is that any objective needs to be based on quantifiable performance and exact timescales. Do your objectives pass the SMART test: specific, measurable, achievable, relevant and time-bound?

For example, the marketing manager needs to arrange two business finance webinars every quarter comprising an expert panel of four guests. Sponsorship must total £5k per webinar and there must be a minimum target of 100 attendees at each event.

Need advice on annual performance reviews?

From an HR perspective, managers should not be controlling bosses. Today’s business culture demands leaders to act more like coaches who can develop the performance of their people.

Whether you are an experienced business owner or a new manager, we recommend that you should seek professional advice. JT HRConsultancy is an established HR services company based in Bedfordshire with clients across the UK.

If you need help of advice on an employment issue, contact me today.

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