The Annual Performance Review is Dead, Now What?
It’s been a slow death, but the Annual Performance Review is for the most part, dead. Soon, we will no longer hear about the annual performance review from companies large or small. It’s a giant, unproductive exercise in project management for the CEO or HR leader with ineffective outcomes.
If you’re like most of the small business leaders that I know you have...
Decided not to performance reviews anymore
Forgot, ignored and have not done performance reviews in the past 1-2 years
Never did annual performance reviews
Why are annual performance reviews so darn ineffective?
They are a recap of a year’s worth of performance. The employees in the 2018 workplace want to spend time looking at the present and the future. They don’t want to look back at 12 months of performance whether it was good or bad. They are asking, what’s next for me, now? What’s coming in the next 3 months?
Our workplaces are fast-paced.. Employees and employers need to have more regular communication about performance and waiting 12 months between reviews is simply too long to build any momentum or plan for development.
Managers were never really good at them. That’s right, when you do something only one time per year you never really get in a steady cadence to be consistent and effective. Besides, most managers begrudgingly did them just to check to a box.
And, I’m sorry! I have pushed the annual performance review in the past and even rolled out new systems to organizations. With a lack of employee/employer feedback it feels like an obvious tool to communicate but alas I think we can do better. We can communicate in better ways to create workplaces where feedback, goal setting, and coaching are frequent and executed with ease.
Small businesses are embracing quarterly reviews. This can be a game changer for your culture, business goals aligned with individual goals, and communication. Let’s look at why and how to do this right.
I am a humongous fan of dropping the annual performance review and replacing it with quarterly reviews. This can be a game changer for your culture when business goals aligned with individual goals and communication. Let’s talk more about why and how to do this right.
5 Benefits of Quarterly Reviews
Cadence - Setting a quarterly cadence helps keep the goals top-of-mind and allows managers and employees to get good at having quarterly performance dialog.
Set achievable, top-of-mind, goals - Set goals that set are small bites (or at least bites of a bigger goal) which makes them easier to digest and accomplish.
Accountability - With a quarterly cadence, and setting meetings in advance, there is accountability built into the process.
Lightweight - Quarterly review are lightweight. They should be thought of a process that is used to manage performance and not an annual event that you do.
Feed Forward - Annual reviews were a tool to provide feedback. Think of quarterly reviews as a way to feed forward and look ahead at goals and performance for the coming quarter.
Here is how to start implementing a quarterly review process
Lay the Foundation - Develop a structure for your quarterly reviews including basic guidelines (who, what, when, where, why and how). Communicate the process to your team and allow time for questions. Also, communicate your goal for continuous improvement in this process. For example, at first we are going to start by using only 3 questions and a 1-page form...in the future, we may add questions and perhaps even utilize software to help manage the quarterly reviews.
Monitor and Improve - Once everyone has completed the first round of dialog seek feedback. Ask managers and ask employees so that you can get a sense of how things went. Look at the results of the review conversations (the quarterly review forms or documentation) for feedback.
Sample Quarterly Review Questions
Assuming you and your team member know the company’s overall goal and mission for the year let the quarterly review be a dialog. Both of you will come prepared to chat and come to an agreement on the following questions:
The beginning of the quarter:
What are your goals for the quarter? How will you make progress towards those goal(s) this quarter? What tools and resources will you need to accomplish your goals? How does your goal contribute to the company’s overall business goals?
The end of the quarter:
What was your biggest accomplishment in the past quarter? Describe where you struggled What’s one thing that could be going better?
Then, document what has been discussed (Google Doc, blank piece of paper, napkin, use this guide, whatever!) and make sure that both the employee and the manager get a copy.
Set a date for the next quarterly review 3 months out. Rinse and repeat.
Keep this process lightweight. One downfall of the ‘annual performance review’ has been the heavy burden that it creates for people. Your goal by changing your process is to make it effective and simple. If it’s too heavy and difficult you’re doing something wrong.