April 20, 2016

Death of the Performance Review: A Pro or Con?

Powerhouse, white-collar companies across the nation have begun to join the bandwagon when it comes to eliminating performance reviews. Companies such as Adobe, Accenture, Deloitte, General Electric, Cigna and Juniper all made the leap last year to eliminate annual performance reviews for their employees and move to a different structure of employee evaluations.

The traditional standard metric of an annual performance review and the forced rank scale is beginning to see its end with companies like these, and others are leaning towards doing the same based on the outcomes of these pioneering companies.

Why eliminate them? There are various reasons that offer an explanation for this question, but across the board it seems that there are a few points that come to mind more often than not. They take too much time for managers to write and think about, let alone finding times to meet and review with employees who are taken out of production. Some feel that an annual review is not enough time nor does it provide enough data to fairly make employee decisions of promotion, raises, etc. Most feel that they do not get an accurate enough metric to justify corporate performance while other solutions are available for real-time company assessment. On an individual level, most managers don’t like giving them and most employees don’t like receiving them! (Talk about walking on eggshells!)

So what are some pros and cons of eliminating performance reviews based on the results thus far from this group of non-performance review pioneers?



Saves management time to write and meet with employeesNo formal record of past performance, standards for next year’s goals, or a plan of action exists
Keep the relationship between employer/employee & employee/employee positive: less stress to not hurt anyone’s feelingsEmployees could be blindsided if there is no formal conversation about poor performance
Annual reviews only temporarily boost performance; not necessarily boost long-term performanceCould be too many things at once for an employee to be working on to develop themselves. May be destructive to the success of short term projects/goals
Existing metrics don’t account for how the work is done which is where employee growth occurs and management can see where training is neededCompanies may need these types of metrics to support corporate performance for the public and/or investors
Shift from justifying a rating to conversations about how to get people where they want to be and where they need to beManagers may not have time for more frequent conversations, or “check-ins” depending on their own work, their team, or projects, etc.
Employees don’t have to worry about being compared to other employees. They can be focused on as an individual and their needs and goalsEmployees want to see how they’re doing in the overall picture of the company. Without anything to compare them against this can be difficult for a manager to answer
Not all company environments can support a change away from annual reviews both structurally or culturally

Based on these company decisions to do away with performance reviews, what are they suggesting will take its place? The answer: an increased frequency in team, department and project check ins.

These check ins–held quarterly, monthly or even weekly–can increase employee engagement, development, and assist management in a fairer way of determining who deserves a promotion, raise, or additional recognition for a project. Millennials especially want to know how they stack up against others but in a way that doesn’t feel archaic and old fashioned.

What is your company leaning towards: keep or eliminate the annual performance review? What would be a better option for the products and services you provide for the community? At Innovative Career Resources you will be sure to find a staff that ranks #1 in talent and client satisfaction so you can be sure that your future employees will have fantastic performance as an addition to your team.

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