Annual reviews are dead – here’s what’s replacing them

Almost half of HRDs don’t consider annual reviews to be an accurate representation of an employees’ work, according to a recent report.

So why are some organizations reluctant to let them die?

The idea that employers sit down with staff just once a year may seem ridiculous in 2019, but for the longest time annual reviews were the done thing. Now, as HR promotes the need for continuous feedback, will we finally see an end to these yearly ‘sit-downs’?

HRD Canada spoke to Laurie Beppel, global product marketing manager at Sage – who’s colleague Sarah Hulsey will be hosting our upcoming webinar 5 Ways to Reinvent Your Performance Management Process. We wanted to know why annual reviews are outdated and what is replacing them.

“By its very nature, the annual review looks backwards,” explained Laurie. “Employers meet with employees once a year, retrospectively analyzing how the worker acted. As such, there’s not a lot of room for improvement.”

“Reviews like this don’t really mean much to people – looking back at things they’ve already done, how they’ve already behaved. And the annual review typically provides feedback by picking out the things that you could have done better or need improvement on, rather than the things that were done well and could be further leveraged or built on.”

“Additionally, this method doesn’t allow for peer-to-peer conversations. One of the biggest changes we’re seeing when talking with our customers is management taking the time to talk to employees’ peers. Employers are asking about daily performance, what aspects of a colleague’s work really stood out to them – it’s much more well-rounded and offers a great view of how an employee is performing.”

Sage no longer conducts annual reviews – replacing the dated method with quarterly meetings and that all-important continuous updating.

“We have a lot of different generations in the workforce right now,” added Laurie. “The younger folks were raised on new technologies, tools which offer instant gratification – as such this generation thrives on continuous, immediate, feedback. They want more coaching and career progression, or retention can become a problem.”

“This makes good business sense – allowing employers to review, digest and offer feedback at a much faster pace. Employees are then able to make adjustments throughout the year based on this feedback, impacting their performance going forward.”

“Consider replacing annual reviews with weekly conversations and updates, peer reviews, quarterly reviews and an end of year meeting. This end of year sit-down allows managers to pull together all aspects of the continuous reviews from throughout the year to facilitate a longer, more productive conversation. There is significant opportunity to shake up performance management and create great experiences to improve engagement and productivity.”

With this method, employees really feel as if they’ve gotten more bang for their buck, so to speak. They’ve received content coaching, had immediate feedback from managers and colleagues – and had a chance to assess their career progression in an open conversation at the close of the year.

Sage will be hosting a free webinar on July 17 @ 1:00 PM (ET). For more information on this webinar, HR professionals can register here.