The Annual Performance Review is dead.

That’s what you’d found if you are researching on the internet on employee performance management these days. Fortune 1000 companies like General Electric are reportedly abandoning annual performance reviews in favor of a more agile way of managing and motivating employee performance.

Source: Business Insider (Side bar)

What is the manager’s typical sentiment on annual reviews? According to a research conducted with Fortune 1000 companies by CEB Research, the process is widely viewed by managers and HR as largely ineffective in providing accurate information in helping employee performance. The effectiveness of annual reviews is increasingly affected by rapid changes at the workplace (see info-graphic below)

Source: CEB Research, PwC Millennials at Work Report, Deloitte Global Human Capital Trends 2016

Why is this happening?


Our recommendation to improve annual reviews
  1. Adopt agile management principles into performance management. For example, performance check-ins can be structured like a quick 10-20 minute weekly 1:1 huddle between manager and employee. 
  2. Create an open culture where regular peer feedback is encouraged and rewarded. Real time peer feedback when combined with coaching makes performance reviews more effective. A great way to culture the culture of feedback is to reward employees who give out helpful feedback to help their peers improve.
  3. Set peer feedback goals for every employee, to make feedback more real-time, allow employees to not only give peer feedback, but also solicit them from their peers any time.
  4. Apply Agile & S.M.A.R.T principles in employee goal setting. Manage them like 7- to 30-day sprints.
  5. Strike a balance between setting corporate KPI and personal goals for employee. Ask employees about what they expect from an experience, growth and contribution perspective and include mutually agreed objectives as part of their development goals.
  6. Use peer feedback to help managers set improvement goals for employees.
  7. Digitize real time peer feedback to reduce the time taken for managers and HR to collect and analyse peer feedback. An intuitive mobile peer feedback app will do wonders to the level of adoption of peer feedback among employees.


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