Say the words annual performance review in a workplace and you’ll be met with groans of frustration, stress, and perhaps even some anxiety regarding work bonuses. These performance reviews are the bane fo every employee and manager’s existence. It means criticism and possibly hash feedback for employees and a ton of paperwork for managers.
Annual performance reviews used to be an integral part of the performance management system but, over time, have become redundant. Its slowly fading out from all companies and is being replaced with ongoing feedback and continuous review and analysis. Let’s look at its evolution and how it impacts a business.
Evolution of Performance Management System
Initially, before there was anything like an LMS or even before computers, companies realized that reviewing the performance of employees was important. They had to make sure that employees were meeting their targets. Employees were appraised annually and were reprimanded for their mistakes.
This wasn’t a productive method because employees couldn’t fix all mistakes after simply being told about them, they needed guidance so managers were put in charge of them, who along with the annual review report provided guidance and positive feedback as well. It was a better system than before but still not efficient, managers many times, played favorites and there was nepotism present too. When technical advancements happened, an LMS took over which made this task much easier and managers weren’t burdened with all the paperwork.
In the past few years, companies realized that while annual performance review had its benefits, I wasn’t an efficient system. Employees were progressing as they should and work would slow down during the time in which these reviews took place. Annual performance reviews were then replaced with 360-feedback and continuous advice, guidance, and analysis by managers. This was taken a step further when organizations placed emphasis on interactions and encouraged employees to learn and seek help from each other and other departments as well as provide feedback on how the organization could improve.
Objectives of an Annual Performance Review
The following are some of the objectives of an annual performance review:
- Identifying the weaknesses and strengths of employees
- To provide correct feedback to employees regarding their work performance
- To assess who is up for pay raise and work bonuses
- Maintaining a record of salaries, pensions, and wage structure
- To identify the potential each employee has for further growth and development
- To improve the working habits of employees
Pros of Annual Performance Appraisal
Many companies still include annual performance appraisals as a regular part of their organization because they believe this is a reliable way to survey the work performance of the employees, the employees expect so work hard at their jobs, and constructive criticism can be given to employees as well as conversing about the future of the organization. Some of the pros are:
- Managers are able to provide one-on-one feedback
- They quantify performance
- They can motivate employees as work bonuses and pay raise depend on annual
- Provide broad access to information
Cons of Annual Performance Appraisal
Annual performance reviews aren’t all that they claim to be and this is the reason most companies have to change the way they’re conducted altogether. Below are some of the cons:
- Are stress-inducing for both employees and managers
- Agility isn’t considered an important factor
- They aren’t timely
- Require a hefty time commitment
- Reviews are many times faulty
- Progress is slowed during the days the annual appraisal takes place
It is evident that annual performance reviews have their advantages and have changed the way how work progress is assessed but, it’s also important to understand that it is a system that has become redundant and while it may outline problems, it has a lot of flaws that derail efficiency.
360-feedback and interaction are better reviewing and improving work progress methods, which timely identify weaknesses and need for guidance. They also make employees feel confident in their work and create a healthy, productive environment.