Are annual performance reviews dead?

Are annual performance reviews dead?

Is there still a place in today’s ever-connected world for the annual performance review?

Many high profile companies  like Adobe, GE, Accenture, Deloitte, IBM and Netflix  are saying no.

Pointing to annual reviews as time-consuming and resource-sucking, they’re shifting to a more agile approach.

And in some cases, they’ve dumped the scaled rating system all together (you know, an annual rating from 1-5 for each KPI).

Here’s their reasoning:

In a Harvard Business Review article, Netflix’s Patty McCord stated: “If you talk simply and honestly about performance on a regular basis, you can get good results — probably better ones than a company that grades everyone on a five-point scale.”

In the case of Deloitte, they found that creating an annual rating of 65,000 employees took close to 2 million hours!

They also criticised yearly goal setting, arguing that goals need to be set and adjusted much more frequently:

“Our design calls for every team leader to check-in with each team member once a week…These brief conversations allow leaders to set expectations for the upcoming week, review priorities, comment on recent work, and provide course correction, coaching, or important new information.”

So what am I saying here? Is the annual review a redundant process from a by-gone era, ready to be written off and forgotten, just like the fax machine?

Not exactly. 

You might not like it, but an annual performance review process may still be an important part of your performance review program.

To help you make an informed decision, let’s look more closely at the pros and cons of annual performance reviews.


Download: ‘All Stars’ Performance Review Guide

Your short guide to building an employee performance review program that breeds excellence:

  • Learn the 3 different levels of employee performance reviews commonly used by businesses today
  • Evaluate your company’s in-house performance review capabilities
  • Find out how to build a performance review program that turns your staff into All Stars!

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Any questions?

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Thanks for sharing!