Employees perform every single day at work. Reviewing this daily performance annually doesn’t make a lot of sense. Past performance can’t be changed anymore, it can only be reflected on. But really, who of us can remember all the reasons for our good and bad performance over a whole year?
Annual performance reviews don’t live up to the changing nature of work that is asking for more timely and frequent feedback. Performance goals are becoming more dynamic and can change quite rapidly these days, meaning that there is an increased need to get people up to speed to perform.
As a leader, you can establish near-time goals with your employees and have frequent discussions that focus on constant improvement and coaching.
Before starting to change your performance review system, let’s have a look at the purpose of the performance management system to understand it completely.
Purpose of a Performance Review System
The system of reviewing performance captures the type of performers you have in your organisation. It provides you with the opportunity to reflect on the organisational effectiveness, which is made up of the people achieving their annual performance goals. Additionally, it serves the purpose of evaluating performance, developing performance as well as rewarding and recognising performance.
Reviewing Performance Annually
What happens when we review performance on an annual basis?
- Your employees might be surprised at your evaluation of their performance if they they didn’t know how they were performing all year against their set goals. Consequently, they wouldn’t have known how to set changes to align their performance with the shifting dynamics of the business.
- A lot happens over the course of a year. It can be hard for you and your employees to remember everything that happened over the year.
- Pursuing a goal that was set at the beginning of the year might be unrealistic in many industries as conditions change over the course of time. If you don’t review how your employees are performing during these changes, chances are that they’ll carry on pursuing goals that aren't sensible or aligned to real-time business needs.
What Needs to Change
These examples show that reviewing performance needs to happen at a more frequent and regular basis. You might ask yourself: How often do I need to evaluate performance if annually isn’t enough? I am already busy as it is! Or, the reviews never really lead to any changes in performance anyway.
The answer to these thoughts is that there is no right or wrong way when it comes to the frequency of performance appraisals. Finding a frequency that works well for you and your employees is key.
A few questions that will help you put a finger on the frequency of such check-in conversations:
- How does the environment affect our work, and when especially? Are there any patterns? These could be changing laws, holiday seasons, consumer habits etc. You could do a PESTC analysis to detect trends and even predict the next wave of change in your industry.
- Is my employee proactive and adaptive to changes of her own volition or does she need my support in establishing what changes need to be made in their performance goals?
- Does reviewing performance lead to actual changes in the way work is being done or what goals are being pursued? We know that doing the same things lead to the same outcomes. Some of us might recognise that goals have shifted, but our ways of doing work remain the same.. Your employees need to be educated, equipped and enabled with the right competencies that will empower them to take meaningful performance-driven steps.
The ever-changing demands of the global economy require your employees to be developing constantly. Reviewing performance should be the first step, evaluating areas in need of development.
Now you know that performance appraisals shouldn’t be limited to once a year, you can read more about how to create a development plan & how to set goals that drive performance in order to bring about the best performance in your employees for the coming year!