Time to ditch the annual performance review?

Cindy Farnsworth
Cindy Farnsworth

The buzz in performance management is no more performance evaluations. A national trend to eliminate annual performance reviews set by such companies as Accenture and General Electric has been followed by such other sizable firms as Gap, Medtronic and Microsoft. 

What does that mean to employers in the Grand Valley? It depends on what your organization tries to get out of performance evaluations. Does your organization conduct performance evaluations to meet the mission, vision and values of the company? Or does your organization conduct performance evaluations just because it’s always been done that way? Perhaps a state statute or government financial incentive requires your organization to conduct evaluations.

According to HR Magazine, statistics show that 95 percent of managers are dissatisfied with their performance review or management systems. So why would organizations want to continue with performance evaluations unless there’s some type of requirement, financial incentive or other tangible benefits?  We all know we’re not conducting annual performance evaluations to reduce our stress levels.

What, then, should we be doing? And who in the organization should determine what needs to be done to measure performance?

There are easy answers to this questions: Organizations should be doing what meets their needs. This should be determined, ultimately, by the person in charge of operations. Why should it be decided by that person? If there’s any expectation something should be done, it has to be supported from the top down or it’s not likely to be supported on the front lines. 

If your organization has an established mission, vision and values defining a performance management system that complements a culture supporting the MV&V, it makes sense to have a performance evaluation of some type. If the lines are blurred on these items, it’s more difficult to look at a performance management system.  Even more challenging is considering the details of annual performance evaluation measurements, dates and tracking. It might be time to bring in a human resource consultant to coach the leaders on how to define a strategic plan for the organization. It also could be time to open up a dialogue with your staff about this topic to define the culture.

If your organization is healthy enough to consider moving away from annual performance evaluations, here are some things to take into account and evaluate about your current process:

Can managers evaluate performance without annual reviews?

What is most accepted in your culture? If you have a mature, refined culture in which evaluations offer a productive means of inspiring employee to meet their goals, why consider changing it?

How much time do managers spend on annual evaluations? Is there a better use of their time?

Is the current process working or causing anxiety for managers and employees?

Why not change the evaluation process? Is your culture willing to embrace new ideas, take a leap and try something new? One of the best HR practices that’s gaining support is a weekly chat between supervisors and employees over coffee.     

Once your organization identifies the gaps in the performance management system — an analysis of strengths, weaknesses, opportunities and threats offers an easy way to do this — and you have a clear vision of how you’d like to measure employee performance, you’ll be able to determine the best solutions for your organization.

If you opt to discontinue annual evaluations and still want to have some type of tool for measuring performance, create something that works for your organization. 

Staci Knob, vice president of human resources for HRL Compliance Solutions in Grand Junction, created a coffee talk form last year to promote the dialogue between supervisors and employees about areas of growth or improvement at the employee, management and organizational levels. That’s one example of finding what’s needed and creating a solution that works. 

Krista Ubersox, a senior human resource analyst with Mesa County, is developing another solution to use  electronic tracking of communication that’s currently taking place on a regular basis. Her intent is not to recreate the wheel, just refine it.

There’s no one performance evaluation solution that fits all organizations. In some cases, there are different solutions for different departments within an organization.  Identify the needs in your organization and then work to create the best solutions to meet those needs.

If you have questions about performance evaluations, reach out to a member of the Western Colorado Human Resource Association based in Grand Junction or join the association for continuous support.