The yearly review is dead

The yearly review is dead

This often dreaded practice dates back to the Industrial Revolution as a way to create a standard for judging worker’s performance. In the 1940’s about 60% of U.S. companies were using a variety of appraisals and reviews to document an employee’s performance and determine rewards accordingly. By the 1960’s in was close to 90%.

Time for a new standard?

This form of review has become the standard across may different sectors and businesses. The problems of this system are becoming all too clear however.
A report by Harvard Business Review shows that at Deloitte, the yearly review took 1.8 Million hours across the whole firm to complete.
Managers at CEB reported that they needed 210 hours to conduct all the yearly reviews! One of the first to scrap this practice, Adobe, showed that their managers would have to spend 80 000 hours combined to conduct the reviews. This clearly shows a major flaw of the yearly review as we know it.

On top of all this time spent on conducting these reviews, employees today want frequent feedback and an environment where ideas and opinions can be shared freely. This way they can adapt and better themselves quickly, learning from their mistakes early on instead of waiting for the yearly review to get feedback. Managers these days aren’t looked at as experts by their teams but more and more as coaches and mentors. People who can help employees develop and grow within their jobs.

The problem with employees seeing managers as coaches is that in many organisations, they are not trained or educated on how to be a coach or mentor. Companies like Adobe, Netflix and Google are the leading example by training managers to fit their new role.

Is the yearly review really dead?

The short answer is no, it won’t disappear completely for now but will be less and less prominent in a lot of organisations by the introduction of continuous feedback. Everyone hates the current way the yearly review is conducted. Managers hate it because of the time investment and employees hate it because the feedback is often not relevant enough and because so much depends on it, the yearly review induces a lot of stress. Another factor of this stress is that during the review, the employee needs to try and recall all the different projects etc… This can be easily dealt with by combining the continuous feedback with continuous self-reflection. Through this an employee will have a better understanding of the situation and the yearly review will be less stress inducing.

In the future, where the yearly review will be dead, managers and employees will have more meaningful relationships. The way forward is by having a system where employees work together to reach goals instead of competing against each other. It is also by changing the role of managers to coaches and mentors that support open communication.

The yearly review is not dead yet, but will be in the future.

Article written by: Matthieu Van Der Poorten

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