Many companies are replacing annual performance reviews with quarterly evaluations. And those of us who have suffered through bad annual reviews can appreciate why more frequent—and clear—performance talks get better results.
Many years ago, I received my first annual performance review. It was high stakes. My "grade" would determine whether or not I got a bonus, whether or not I got a raise, and whether or not I had a future at the law firm.
I had no idea what to expect and feared the worst.
To my relief, the review was positive. However, one comment stuck in my craw. The associate review chairperson told me one of the partners said, "Jathan needs to take a remedial writing class."
Initially, the chairperson wouldn't tell me who made the comment. Eventually, I persuaded him to share the information. With disingenuous obsequiousness, I said, "This information will help me grow and develop as a young lawyer."
I went to the partner in question and asked him what was wrong with my writing. He seemed uncomfortable and said, "I gave you that assignment early in the year. I don't remember a whole lot other than it wasn't very helpful."
That feedback is not helpful!
Determined to make him eat his words, I went to another associate attorney and asked her to show me an example of a memo she had written that he liked. She did.
I quickly grasped the problem. Especially in those days, I had an infatuation with flowing prose. By contrast, the memo she showed me looked like a glorified outline: lots of headings and subheadings with bits of text in between.
I went back to the partner and said, "I've been working hard to improve my writing. Can I have an opportunity to show you what I've learned?"
I researched and wrote a new memo using an outline form and incorporating roman numerals. As I added details, I worked my way down to outline symbols I previously didn't know existed.
The result? For the rest of my time as an associate, this partner gave me more work than anyone else, and he was my strongest advocate when I was trying to make partner.
So does this happy ending mean the annual performance review works? I don't think so. And don't give me credit for taking initiative to improve my performance—I did it because I was mad and wanted to prove him wrong.
During my career as an employment law attorney, I encountered annual performance reviews in all shapes and sizes. If the goal was to improve performance, engagement and retention, the results I observed were mostly dismal. Typically, these reviews were a colossal waste of management and HR time and energy and served as a source of employee stress and anxiety.
I heard the justification, "Well, we have to do them to protect the company from legal claims."
In my experience, however, annual performance reviews have more often increased claim risk than reduced it. Why? Reviews are frequently done so poorly that they generate employee animosity and create grist for the legal mill.
So, should we abandon the annual performance review? Or can it be done right and lead to improved performance, engagement and retention?
Making the Switch
"For the reasons you describe, we have abandoned annual performance reviews," said Paul A. Jones, chief leadership development officer at USANA Health Sciences Inc.
"Instead, we do quarterly manager check-ins where three questions are discussed:
- What did you do well in the past three months? (Include things to keep doing and to accelerate doing.)
- What could you have done better? (Include things to start doing and to stop doing.)
- What are your goals for the next three months?
"We also do an annual 'Talent Review' that is a simple, 360-degree review provided by supervisor, direct reports and peers who are affected by the individual's performance. It assesses their perception of the employee in four areas:
- Overall performance.
- Job-related skills.
- Risk of low performance in the near future.
- How essential the employee is to company success.
"This helps us identify our top [and bottom] performers from the perspective of the stakeholders and provides opportunities for quarterly discussions about successes, progress and developmental areas.
"This approach has been much more effective than, as one employee put it to me, 'the annual devaluation.' "
What Do You Think?
I reached out to my network, seeking advocates of the annual performance review. I found no takers.
Are you an advocate of the annual performance review? If so, I'd love to hear from you. In a future column, I'll share your view and experience.
Otherwise, perhaps it's time to follow Paul Jones' example and ditch the "annual devaluation."