3 Alternatives to the Annual Performance Review
In the past few years, several leading HR publications have discussed the downward spiral of the annual performance review. SHRM’s “Is the Annual Performance Review Dead?” and HR.com’s “The Slow Death of Annual performance Reviews,” are just a couple of examples. However, while many thought leaders and experts are quick to downplay the effectiveness of the annual performance review, seldom offer alternative methods of feedback to take its place.
The move away from annual performance appraisals can be attributed to shifting mindsets, preferences, and needs of today’s modern workforce. Millennials, who now represent the largest segment of the United States’ workforce, are asking for more frequent feedback, yet many managers don’t have access to the tools and strategies needed to meet their requests.
So, as organizations look to venture away from traditional feedback tactics, here are three more innovative alternatives to optimize employee performance and engagement.
Set SMART Goals
Goal setting is an important part of measuring performance, and setting year-long goals to be judged during annual performance reviews can be difficult to measure and demoralizing to employees if they the goals set seem unrealistic. Executives should implement SMART goals, which are goals that are Specific, Measurable, Attainable, Relevant, and Time-Based. These goals are usually short-term, and are meant to challenge and motivate employees without seeming too far out of reach.
While the technique has been around since the 1980’s, SMART goal setting has become increasingly popular among startups and small to mid-sized organizations that are moving away from the annual performance review. SMART goals break larger goals down into smaller, more achievable goals, and give employees a sense of accomplishment when they are met. They also make it easier for managers to closely monitor and track employee progress, addressing issues when they arise.
Schedule More Frequent, Informal Meetings
When we think of the annual performance review, the first thing that comes to my mind is a formal, scheduled meeting that festers in an employee’s mind for days, or even weeks, prior. These annual appraisals boil a year’s worth of effort, pressure, successes, and failures down to one meeting that often dictates an employee’s bonus potential and/or likelihood of promotion. That can be a lot of pressure, and the thought alone of a negative review may distract employees from their primary responsibilities.
This explains why many employees are craving more feedback in real-time, rather than months later, and why more executives are beginning to transition towards more frequent and less formal meetings to bring employee’s up to speed with how they are aligning with management’s expectations and any ways they can proactively improve their recent performance. These meetings also give employees a chance to voice their concerns and challenges, while allowing management to provide constructive feedback.
Invest in Performance Management Software
In today’s workforce, almost everything is digital, from the way employees communicate to the way executives manage their workforce. Technology has automated some of the most labor-intensive functions of various positions and freed up time for employees to be more impactful within their organizations. The impact on technology has even changed the way innovative leaders have restructured and revolutionized their performance review process.
Modern performance management software allows managers to set individual and team goals for their employees, and track their contributions to organizational initiatives. Managers can also rank configurable employee attributes throughout each review period, and use that as a platform to guide discussions during the performance review itself. These rankings would then be stored in a unified database to track progress throughout an employee’s lifecycle.
There are many ways to shift your review process, and while the list above may not be exhaustive, it’s a great start to improve employee engagement within your organization. Tracking performance is key to making sure your organization is made up of employees that are committed accomplishing their goals, contributing to the success of their team, and having an impact on the organization’s overarching mission. Rather than waiting a year to tell employee’s how they are performing, start giving more frequent feedback today and achieve more together.
Click here for more information on Performance Management software solutions.