Annual performance reviews do a disservice to workers and firms
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Another year nears its end, and another annual performance review season draws near. Your manager is probably busy gathering feedback about your work and highs and lows of 2019.
If you have ever left your end-of-year performance review confused, blindsided or even surprised by how well or not well you are (apparently) doing, then your company doesn’t have an effective feedback culture in place. For many of us, these dreaded annual reviews are characterised by anxiety, stress and — in some cases — relief.
Yearly reviews are hugely outdated. Performance appraisals date back to the first world war. Why are they still plaguing our modern offices?
With so much talk of companies putting their employees at the heart of their business, it seems odd that so many of them are still wedded to these yearly “highlight reels” that do little to motivate or inspire people. A survey by the Society for Human Resource Management, a professional organisation, found that 95 per cent of employees say they are dissatisfied with their employers appraisal process.
The reality in most companies is that performance reviews are still closely tied into promotion and pay, so they play an outsized role. We need to find some other objective measures to assess people fairly — and make sure rewards are distributed in as fair a way as possible.
Too many organisations approach performance assessments in an arbitrary and inconsistent way. This opens the door to discrimination and bias and therefore to missed opportunities, unequal pay and career stagnation, which can disproportionately affect women and minorities. Black Facebook staff recently described their experiences of racism in an anonymous letter in which they accused managers of only focusing on negative feedback in reviews. In one employee’s case, a manager actively sought out criticisms from the employee’s colleagues. This all contributes to a toxic workplace.
As does not ensuring that men and women receive equal treatment. A Harvard study shows that men tend to get more helpful feedback during performance reviews. Sixty per cent of men compared to only 40 per cent of women have their feedback tied to business outcomes. Women also tend to receive vaguer comments (meaning they are not tied to concrete performance measures, for example: “positive stakeholder feedback”).
The yearly performance review does not suit millennial and Gen Z workers whose commitment to self improvement means we prefer real-time feedback throughout the year. We value ongoing conversations so that we can make frequent incremental adjustments. This is tied to a desire to feel challenged, develop faster in our careers and find meaning in our work. It also fits with our digital habits, which are driven by instant likes and comments on social media posts.
Alarmingly, a PwC report revealed that only 12 per cent of millennial women are satisfied with the quality and frequency of feedback they receive. The Harvard study among others show that women’s reviews are more likely to include critical language focused on their personality or communication style and use words and phrases such as “assertive”, “bossy”, “abrasive” or “watch your tone”.
For one of my reviews, I spent days trawling through my past year’s work, making an inventory of all my accomplishments and measuring them against objectives, only to find my manager only wanted to focus on my personality, not my performance. It was an uncomfortable and ineffective review.
Annual reviews should be future-oriented and provide guidance about what someone needs to improve on or do differently to get them to the next level. This allows us to take ownership of our learning development and helps keep motivation to perform high throughout the year.
The current approach to performance reviews is unsuited to workers of all ages — not just millennials. According to a McKinsey study, some companies do not have clear and specific performance criteria before reviews begin. Improving the review process would not just give us a better way to track our progress but would also help companies to improve their performance as they would be able to support and develop their staff better. It is vital that managers learn how to give feedback that works — a feedback session should not be a moment you dread. Nor should it leave you baffled or demotivated.
However performance management evolves, with an increasingly diverse generation entering the workplace, let’s ensure that people are put at the heart of these conversations. Then what we create will be accurate, inspiring and effective.
Although there is not yet any objectively agreed upon or widely used alternative approach to performance reviews, you should nevertheless come to the annual meeting prepared. Have a list of your accomplishments and evidence of your contributions to hand. But if the meeting does not go to plan, advocate for yourself, direct the conversation towards the future and be ready to suggest your next performance goals.
As the saying goes, “if it ain’t broke, don’t fix it”. But since backwards-looking and overly critical yearly reviews are clearly a broken way to assess people at work, we must fix it — and fast.