Why You Shouldn’t Give Annual Performance Reviews

Feedback is important. It’s how employees know that they’re doing a good job. It’s also how they know there are areas in which they need to make changes. Both praise and constructive criticism can help improve both their motivation and performance. So why wait until the annual review rolls around to give this feedback?

Difference in Perception

One of the biggest problems with annual feedback is that it allows the employee perception of their work to differ from that of management. Employees can think they’re doing a good job when in reality they’re not meeting expectations. Then, when they’re informed of the disparity in the annual review, they’ve been under-performing for months or even most of the year.

Employee Demotivation

It can be demotivating for employees to discover at the review that what they had thought was a good job was in fact not meeting expectations. Perhaps a mistake was made in one project that was carried on through subsequent projects. Maybe they were consistently under-performing. Whatever the issue was, employees can be blindsided by it in the annual review, which can affect morale.

The Business Misses Out

If an employee is informed of a mistake or under-performance in the moment, they can address the problem immediately. Employees will then be more quickly meeting expectations. They’ll be more productive, produce higher-quality work, and be more engaged.

Waiting until the annual review causes the business to miss out on this higher level of productivity.

Bad Habits Persist

It can also be difficult for an employee to switch gears and change what they’re doing after it’s been allowed to become a habit. If there are multiple improvements that need to be made, trying to change them all at once after the performance review may be overwhelming. In addition, if a mistake was made too long ago, an employee may have difficulty remembering what had happened.

This makes it difficult for employees to actually address problems that come up in the annual performance review.

Lost Time

Most performance reviews involve employees and managers both filling out an evaluation form. This takes time away from their actual work. Employees stress about the evaluation ahead of time and those nerves can affect productivity, too.

Offer Real-Time Feedback

The best solution is for managers to give feedback to employees in real-time. That way, corrections come when they’re needed, not months later. Employees can implement corrections immediately and feel good about their work when they do so. The company benefits from having better and more productive employees.

Offering feedback when it’s needed will help your employees feel confident that they’re doing a good job unless they’re told otherwise. They won’t worry the entire year that they’ll have a bad performance review.

Provide Guidelines

Offering feedback in real-time can be trickier than it sounds. Many managers like the annual performance reviews because they can avoid the confrontation of giving feedback. Providing managers with guidelines on how often and what should be covered.

Managers should be regularly touching base with their employees. This can be on a per-project basis, weekly, or even monthly, depending on your company’s needs. Managers should also inform employees immediately if there’s a problem.

Positive Feedback

It’s important to provide positive feedback as well as negative feedback. Employees can become demoralized if they only hear from managers when they’re doing a bad job. Keep your employees motivated by praising a job well done. You can also provide rewards for employees who go above and beyond.

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