Thankfully though, it’s on its way out and and there are lots of reasons why. For starters, because it just doesn’t work anymore. Numerous studies have proven that organizations and businesses who have replaced the annual review process with continuous feedback show better employee engagement and satisfaction. And secondly, well…we just hate it! Here are 8 good reasons why.
In fact, data indicates that over 95% of managers and employees hate the annual performance review.
Lengthy, time-consuming, expensive, shall we go on?The annual review process can be long, tiring, and extremely time-consuming.
That can include anything from scanning emails to digging through files to reviewing documents. Adobe, prior to abolishing their performance review process, found that their managers spent more than 80,000 hours a year just on the performance review process. That equates to about 40 people a year working full-time, just on performance reviews!
During the review process, employees spend on average over 25% of their productive time collecting information for their performance summary.
Tedious processUnfortunately in this case, with lengthy and time-consuming, comes tedious. Apart from writing what feels like essays about our performance over the last year, someone has to read through all those comments, document it, provide feedback, make an assessment, rate the person, discuss the rating and so on. People have to wrack their brains to remember what they worked on that year and how they performed. Managers have to assess each employee, explain why they gave that rating, and award (or not) their performance. It’s a tedious process, and one that comes with mountains of paperwork, endless meetings, and lots of frustration.
Often seen as pointlessSo what’s the point in doing all of this? According to a poll conducted in San Francisco among 2,677 people at the consulting firm Achievers, 98% viewed the whole performance review process as unnecessary. And about a quarter of those people were HR professionals. (Source) We don’t need performance reviews anymore to justify bonuses or raises, nor do we really need them to assess performance. Especially now with more and more companies adopting continuous feedback to improve people performance, we usually know where we stand, so a once-a-year process just seems…well, pointless.
Our issues are not addressed after the reviewSince the annual review is such a tedious and time-consuming process, it doesn’t leave much time to actually address or solve the issues of the person being reviewed. In many organizations, once the review is complete, the employee, manager, and HR signs off on the review then “files and forgets.” Once the review is filed, most managers are never held accountable to follow-up on any issues, feedback, or concerns. This can negatively affect the morale of the company and contribute to distrust between employees and managers.
The process is too standardizedThe performance review was introduced during the Industrial Revolution when work was mechanicalized and each person’s goal was to simply hit a number. But now, our goals are much more complex and we cannot assess a person’s performance accurately with the Industrial Revolution-era performance review.
Take standardized testing in school for example. A student’s score does not necessarily indicate their level of intelligence, but rather how good they are at taking a test. The same applies for the annual review. While some employees can really beef up their accomplishments and performance, other employees may be too shy or lack the confidence to do the same. So, what it comes down to is how good you are at taking tests.
The monotony of the review process just doesn’t work for our complex workplaces; it’s too standardized.
Can give us anxietyIt’s been known that annual performance reviews cause a lot of anxiety. For employees, the thought of receiving any kind of formal feedback can be nerve-wracking. No one likes to think about the possibility of negative feedback, let alone actually receive it. Knowing that annual performance reviews can be used to highlight flaws, the review process can be a source of stress rather than a forum to have productive and developmental conversations.
One-way conversationOften times, the annual performance review is a one-way conversation. Feedback is only given from the manager’s perspective and there’s not much room for the employee to defend or debate a rating. Even when an employee has the chance to appeal a rating, the conversation usually goes nowhere. And if the employees are given the opportunity to provide feedback for the manager, it’s often anonymous, creating a lack of transparency, so it’s still a one-way conversation.
Performance reviews are more subjective rather than objective“Rater bias,” as its called, is when the biases, known or unknown, of the rater get in the way of a fair, unbiased performance rating. Majority of the time, external factors that are unrelated to performance, like race, gender, or even the rater’s mood, contribute to or cause “contaminated” reviews. Rightly so, this can make people feel jipped out of a fair review or even feel confused. If a person’s performance review isn’t based on objective criteria, it can seem totally unfair. Translating that into how it affects business; rater bias can lead to decreased job satisfaction and high turnover.
Is it over yet?The list of reasons why we hate the annual performance review is endless. So why do companies still do it? It’s because of status quo, the fear of change, and not wanting to be an early adopter of HR tech software. We’ve seen from numerous studies, research, data, etc., that the performance review process is still important, it’s just that there are better ways to do it. For one, it doesn’t have to be in the form of an annual review.
It can also be designed in a way to only include objective criteria that is strictly related to performance. All Elements software platform helps everyone in your organization measure performance as it happens. All Elements provides accountability and transparency on a daily basis by setting you up to have continuous conversations surrounding performance, goals, and recognitions.
Measuring performance can come from frequent, more informal conversations, continuous feedback, and 1:1 meetings.