Why You Should Consider Ditching Annual Employee Reviews

As a manager, I always hated the annual employee performance review. The company provided a form with the same criteria for every employee, but those criteria aligned well for none of them. It forced me to evaluate in ways that I felt were inappropriate for each employee. Even more obnoxious, I had to ask each employee to use the same form to evaluate themselves. It never worked for the company or the employees.

Fortunately, companies are finding better ways to provide employee feedback. Early last year, for example, IBM eliminated its long-standing employee performance review process and replaced it with a new one called Checkpoint. Checkpoint was crafted based on employee feedback with the objectives of making performance evaluations more productive in terms of meeting company goals and more effective at developing talent.

This was a significant event, because IBM had been using performance reviews to rank its employees, putting them in competition with each other for promotions or to keep their jobs. That made the performance review a highly stressful event for employees.

Checkpoint eliminated staff ranking and simplified how employees were evaluated. IBM employees are now reviewed against five basic goals: business results, impact on client success, innovation, personal responsibility to others, and skills. It also increased the frequency at which managers provided feedback against shorter-term goals.

IBM is just one of many companies large and small that are rethinking employee performance reviews. I’ve distilled some of what those companies are doing into the points below. Perhaps they will give you ideas for improving your own employee evaluation process:

Give feedback in as close to real time as possible. What’s the point of waiting if you have an opportunity to provide constructive criticism or praise? Your feedback will have the most impact if it’s given in the moment.

Make sure every employee has clear, well-defined, mutually accepted, and measurable goals. You need agreement with every person you manage about what is expected, whether it’s meeting a company goal or changing an individual’s behavior. Again, don’t wait to evaluate performance against those goals.

Ensure that all goals and expectations are achievable. Goals are useless if the employee feels it’s impossible to meet them. It’s OK to have a stretch goal or two as long as the employee understands and accepts the challenge.

If appropriate, consider a project-based performance review. For example, you might task your marketing manager to develop a new campaign. Work with that person to establish goals up front and then use them to measure progress while the project is active. When complete, do a post-mortem offering praise and coaching advice.

Collaborate with employees on individual goals and development objectives. This gives the manager the opportunity to communicate what the company needs from the individual. By seeking input on how that person might meet those expectations, the manager is empowering the employee, in turn making them feel more invested in the process.

Schedule regular check-ins. The positive effects from that collaboration can erode if there isn’t some kind of regular feedback loop. Schedule regular check-ins to talk about progress, changes of plans, or anything else relevant to the employee meeting goals.

Be aware of the employee’s interests and career goals. The review process needs to go both ways. Employees will buy in if they feel the process is helping them get to where they want to be as professionals.

Michael Nadeau
About the Author
Michael Nadeau is a contributing editor for ENX Magazine.