September 09, 2022

Is the Performance Review Dead?

by Sharon DeLay, GO-HR

In 2018 Inc. declared that the performance review is dead. General Electric said as much in 2015. They’re partially correct. The annual performance review, a holdover from the mid-20th century, is a relatively ineffective tool to communicate an employee’s performance. Nearly a year between check-ins is... ridiculous.

Everybody hates performance reviews. For employers, it’s an annual ritual to dig up performance wins, concerns, and generic goals; for employees, it’s a stressful process to sit through to rehash things that happened ages ago and they’ve moved on. The performance review has lost its effectiveness for employers and employees, but it’s still a necessary part of the employer-employee relationship. It just needs to be done differently.

For the employee, the performance review process should be:

• An indicator of what they’re doing well and on what they need to improve.
• A tool that sets out goals for the coming review cycle.
• An opportunity to develop a relationship with their direct manager.
• Expectations and accountability for their role and professional development.

For the employer, the performance review process covers many of the same benefits as noted above, and:

• It creates a vehicle for documentation that can protect an employer from wrongful termination claims.
• It forces managers to step out of their technical role and develop their management and leadership skills, which you want as an employer.

This all sounds idealistic, but it’s actually realistic. To improve the process, consider these changes:

• Discuss the process from day one, letting employees know how it works and what to expect.
• Ditch the annual review and opt for a quarterly review (at minimum) cycle. This ensures that performance that is discussed happened in a more time-adjacent period and is more accurate.
• Approach performance discussions as two-way conversations rather than a one-way verbal vomiting of everything and the kitchen sink.
• Ensure discussion items are relevant to the employee’s job and something within the employee’s power to influence.
• Don’t promise what you can’t, or don’t intend to, deliver.
• Use them to manage performance, not raises.
• Limit the items discussed to three to five per session. While research indicates people can recall up to seven items, this reduced number will help improve retention of discussion points and engagement in the process.
• Ensure each party thoroughly understands all points of the discussion. Perceptions can vary drastically, so clarification is key.
• Be consistent in conducting these check-ins.
• Provide opportunities to capture comments from all participating parties. Failure to do so appears almost as if you intentionally don’t want the employee to weigh in.
• Document every conversation. Send an email on the same day to the employee outlining the key discussion points, take-aways, and due dates. Invite them to confirm or clarify to ensure all parties are on the same page.  

If performance discussions become actual performance management rather than performance punishment or something to check off the list, it becomes a more useful tool that should tell a more accurate and rounded employment story. 

If performance discussions become actual performance management rather than performance punishment or something to check off the list, it becomes a more useful tool that should tell a more accurate and rounded employment story.