Last year one of the largest companies in the world, Accenture, ceased to use performance reviews for their 330,000 employees. The scrapping of reviews on such a large scale leads you to consider ‘Are they worthwhile and is there something more effective?’
With all the time it takes to prepare and conduct performance reviews, are they actually assisting you to improve your business?
For one thing, if you are just going through the motions of conducting reviews say, on an annual basis, if you have no follow up after the review it’s another 12 months before any issues are addressed. Not following up after a review can have negative consequences, for instance if an employee is waiting for training to carry out their job effectively or continues down the path of poor performance.
If you only sit down with staff infrequently, they may not feel comfortable providing feedback or suggestions. Meeting in this capacity once a year means you don’t have the relationship established to enable them to speak freely and they may feel intimidated.
If you are to eliminate performance reviews, you’ll need to change the way you manage performance, not just drop them entirely.
It’s more important to constantly stay in touch with your staff (not micro-manage), so you can become aware of anything which may turn into a major issue either for the business or the individual employee, or both. Weekly meetings with staff (however how short) will give you or your managers the opportunity to assess staff performance and provide any assistance to ensure staff can perform their roles effectively.
You might be saying “I don’t have time to meet with staff that often”. You must consider the alternative, the time it takes to sort out problems (and sometimes dissatisfied customers), how difficult it is to replace unhappy staff and the cost in lost productivity.
Annual reviews may be the way you currently decide which staff to reward with pay rises and identify underperformers, but why not let employees set goals and evaluate them on a more regular basis?
We all know motivation differs for each individual, but setting goals and providing rewards may be one answer and rewards need not be monetary. See Rewarding Your Employees Need Not Break the Bank: https://www.agcareers.com/newsletters/Rewarding_Your_Employees_Need_Not_Break_The_Bank.htm
Are performance appraisals a way to provide positive constructive feedback, not always. If Managers are forced to rank employees once a year, how can you remember the highlights (and lowlights) after 12 months for each employee?
Self-evaluation may be something to consider for your employees, but ensure it occurs on regular basis, not just once year.
Staying in touch and regular feedback also allows you to quickly ascertain if an employee is a good fit for the role. You will be able to determine quite soon if you need to move them to another role or coach staff with underperformance issues.
Another reason you may be currently carrying out a formal appraisal each year is that you are trying to ensure you are covered in regard to workplace law. During a performance appraisal may be the only time you note lack of performance in writing, but this should also take place on a more regular basis and can be documented at any time.
Providing continuous positive and constructive feedback (both written and verbal) and being open to receiving the same from employees, may be the answer to improve workplace productivity and promote a harmonious work environment.