Are Annual Performance Reviews Still “A Thing”?
It used to be that companies held annual reviews toward the end of the year. With that usually came raises or promotions or anything that may have come as a result of those performance reviews. The question is today, is that still a good idea? There are two trains of thought on this issue, one being the traditional annual performance reviews, and the other being more frequent “mini reviews” throughout the year. What works best for you is what’s important.
Out with the Old
Annual reviews cause a lot of stress amongst managers and employees waiting for that big day when they finally get their review. It also causes a lot of stress for managers trying to capture all the events or performance issues from the last year. Perhaps in much larger companies with layers and layers of management this might work, but with smaller businesses it tends to disrupt their normal flow of work and leave the employee wondering for an entire year.
Another problem with annual, or semi-annual performance reviews is that you might miss opportunities to provide positive feedback, or deal with problems during the year when they happen. A lot of times the good things will be forgotten and only the bad things are remembered. This makes annual performance reviews an inaccurate way of assessing employees’ performance and deciding on their future with your company.
Mini-Reviews
Holding more frequent, informal mini reviews is a trend that has caught on in many businesses, both small and large. Regular feedback is important when dealing with employee performance and is a key factor to fostering employee engagement. This approach can spot potential problems early before they fester and/or explode. Catching them early is a way to help guide that employee towards the right level of performance or behavior. When ignored or put aside until the next big review, those issues get buried and generally tend to become bigger issues down the line.
Today’s employees are much more in tune with what's happening in the trenches of the business, particularly if they’re working for a smaller company. Younger employees, today's millennial workforce, are more accustomed to receiving frequent feedback from their parents, sports teams, and schools. This is important to keep in mind if you manage a younger workforce, however, providing consistent feedback, whether positive or negative, can have a meaningful impact on your entire workforce, millennial or non-millennial, and help to guide them on the right path.
Constructive Feedback
When informing an employee of any negative work performance, be sure to do this constructively. It’s fine to bring up underperformance, but then you must lay out a clear expectation of what the employee should be doing, and how they should do it. Leave nothing open to interpretation, be clear so the employee walks away with a solid goal to improve. You want results! So be clear as to what those results look like.
More is Better
For many small businesses, informal, more frequent reviews throughout the year have had a much more positive impact on performance. We’ll discuss some practical ways to manage regular performance reviews in another blog. If you haven't done performance reviews in a while, maybe it's time to rethink this process for your business. Whether you decide to hold them frequently, semi-annually, or annually, it's important that employees hear from you and that you engage with them a regular basis. Please reach out to the HR experts at Infinium HR for assistance in helping you establish a more effective performance review plan for your employees.
If you need help with how to structure this in your business, please contact the HR pros at Infinium HR.