Data continues to show that traditional performance reviews aren’t cutting it.
If there’s one thing that employees and managers dread, it’s the performance review.
In a traditional performance review, there is typically a formal meeting that takes place once or twice a year. You sit down with your employee and evaluate their strengths, weaknesses, and tell them your expectations for the next year — with a quick question for feedback at the end.
But the reality is, this format doesn’t work. Employees actually love getting constructive feedback and recognition, not just from their managers, but from peers and clients as well. And they’d prefer to get it more often. In fact, switching up your performance review process can help you boost retention and productivity.
Keep reading to learn why you should ditch the traditional performance review and what you should do instead.
The verdict is in: traditional performance reviews don’t work
Study after study has proven that the traditional performance review is a relic that needs to be kicked to the curb. These formal reviews typically focus on the employee’s progress and are intended to set expectations going forward. But more often than not, they came too little, too late.
There are several reasons why these reviews just don’t work. Here are our top 5:
Reason 1: 95% of companies hire the wrong people … every year
At first glance, recruiting and performance reviews don’t appear connected. But in reality, if you don’t know your workforce and their day-to-day challenges, how can you effectively find the right hires to fill the gaps? Or evaluate those new hires effectively?
Traditional performance reviews make it easy for miscommunication and assumptions to slip into the recruiting process. And if you wait 9 to 12 months to check in with your new employee, you run the risk of missing critical issues that affect motivation and retention.
Reason 2: Focusing on weaknesses reduces productivity by 27%
In a traditional performance review, managers tend to overemphasis weaknesses, with the hope that employees will focus on improvement during the next year. But study after study has shown that extensively covering an employee’s weak points will cause an overall drop in productivity.
In fact, switching it up and focusing on an employee’s strengths can boost productivity by 8.9% and reduce turnover rates by over 14%.
Reason 3: Too many employees are forced to wait too long for feedback
Over 30% of employees have to wait 3 months or more under the traditional structure — even when 96% of employees agree that regular check-ins are beneficial.
Formal reviews generally happen once or twice a year. Or if you’re lucky, once a quarter. Over 30% of employees have to wait 3 months or more under the traditional structure — even when 96% of employees agree that regular check-ins are beneficial.
Waiting too long to give a performance review can demotivate employees while allowing common errors to go unnoticed. And waiting months to check-in can have the employee looking elsewhere for recognition.
Reason 4: Most employees and managers believe that a lack of communication is the root cause of failure
In addition to traditional performance reviews being rare, they can cause massive gaps in communication. Since a traditional review typically uses a hierarchical relationship between the manager and employee, these discussions usually end up revolving around the employee’s strengths and weaknesses.
But expectations and environmental challenges are often glossed over if discussed at all. This can impede or stop success in its tracks, while a more collaborative approach might have resolved these issues.
Reason 5: 1 in 4 workers admit that they will leave a job if their performance reviews are subpar
Employees, whether they are struggling or not, do want to be recognized for their hard work. Without regular access to both positive feedback and constructive criticism, it’s likely that an employee will begin to feel more like a cog in the machine than part of a team.
And most traditional reviews are likely to turn off employees. As we discussed earlier, these reviews are too rare to be effective, with inadequate content.
You would be better off finding an alternative system that can regularly motivate employees.
Without regular access to both positive feedback and constructive criticism, it’s likely that an employee will begin to feel more like a cog in the machine than part of a team.
What’s the alternative?
If we were to summarize everything wrong with performance reviews, they would be that the formal structure has issues with timing, content, and communication. Generally, traditional reviews happen too rarely to be effective, the content is often one-sided, and overall there the lack of communication between employees and managers causes a breakdown later on.
The good news is that there are alternatives to the formal performance review. Instead of sitting your employees down for a general meeting once a year, you can use:
Regular one-on-one meetings
Either once a month or once a quarter, take each employee aside for a one-to-one meeting. This can be a collaboration to highlight current challenges and successes, or a way to better understand how you can help your employee reach the next level. One-on-one meetings are an excellent way to build rapport, trust, and communication with your individual employees.
Why not take 20 minutes once a week to check in with your employees or your small team? You can even bring in other subtle ways of recognizing employees, such as anonymous peer review comments or other forms of interaction.
Whatever you choose to do during your weekly session, the goal is to make sure employees know that your door is open.
While a bit more impersonal, take time to go over results with your employee. Not only will this keep both you and your employees focused on meeting objectives, but you can find ways to address their weaknesses in a productive manner.
Ask your team to anonymously rate each other’s performance. While these reviews can be taken with a grain of salt, they can also help you pinpoint challenges your team is facing.
Ask your employees to review the managers
Managers need just as much feedback as any other employee. Getting feedback from the team about management can help you learn what they need to feel more supported.
In addition to these tips, you can improve the quality and quantity of feedback by removing the link between performance reviews and raises, and through adopting digital approaches to collect employee responses.