Most leaders already know this, but a new study backs up common sense when it comes to annual reviews. While significant amounts of time and energy are spent on annual performance reviews, a new study says they should not be relied upon as the key way to measure employee effectiveness.
The vast majority of professionals surveyed (87%) say they have an annual performance review with their boss. However, nearly all (96%) say real-time feedback and ongoing performance discussions with their bosses are more effective than an annual review, and nearly half (46%) say that the goals they set in their reviews are no longer applicable a year later when they sit down to measure performance.
While respondents indicate they prefer ongoing feedback to annual reviews alone, they did offer some positive thoughts on portions of the annual review process. Sixty-eight percent say they look forward to their annual reviews and 71% say it is fair to base annual compensation increases on the result of the annual review.
“When approached effectively, an annual review can be a positive tool in helping increase performance, but it shouldn’t be the only way success is measured,” said Lemaire. “Regular feedback can help employees course correct in real time and can help them adjust as business needs change.”
Source: Korn Ferry
CEA Comments: It’s important to revise and update your annual reviews. Life changes so quickly and so do job requirements and expectations. Making sure you sit down with an employee to really hear what they have to say, whether it’s once a month, once a quarter or at least once a year, is absolutely critical in a healthy work environment. There’s a terrific book called "Catalytic Coaching" that really turns reviews upside down with fun questions like “What do you want to be when you grow up?” that help turn a dull conversation into an engaging dialogue between employees and supervisors. Let us know if CEA can help you with your performance reviews.