April 5, 2017

What the Experts Really Think About Performance Management


Performance reviews have long been a subject of debate. With the implementation of new HR technologies like automated microfeedback, people are starting to question whether regular performance reviews are useful at all. Only 8 percent of companies believe their performance management processes deliver high levels of value, so why waste the time?

With this in mind, here’s an overview of how three top performance review experts feel about annual reviews:

Frequent Feedback Is on the Rise

“People want to know on an ongoing basis, am I doing right? Am I moving in the right direction? Do you think I’m progressing? Nobody’s going to wait for an annual cycle to get that feedback.” – Pierre Nanterme, CEO, Accenture

The annual review seems to be on its way out – no wonder when 45 percent of HR leaders don’t think annual reviews accurately appraise employees’ work.

Exit annual reviews, and enter microfeedback. New automated systems make tracking employee progress a breeze. Many systems can send employees feedback once a month, bi-weekly, or even once a week. Take a cue from companies like Deloitte, which now requires team leaders to check in with each team member once a week.

If Everyone Hates It, Throw It Out

“Performance management as practiced by most organizations has become a rule-based, bureaucratic process, existing as an end in itself rather than actually shaping performance. Employees hate it. Managers hate it. Even HR departments hate it.” – Laszlo Bock, Former Senior Vice President of People Operations, Google

The bottom line is, if nobody likes it, it won’t be good for business. Even helpful, constructive feedback will lose its value when wrapped up in time-wasting rules and regulations. Unsurprisingly, considering how much everyone hates them, 30 percent of performance reviews end up actually damaging employee performance instead of improving it. After too many unhelpful annual reviews, employee engagement is bound to take a hit as well. Switch to frequent feedback if you want to avoid retention and engagement problems.

Make Way for Millennials

“The world isn’t really on an annual cycle any more for anything. … It’s the way millennials are used to working and getting feedback, which is more frequent, faster, mobile-enabled, so there were multiple drivers that said it’s time to make [a] big change.” – Susan Peters, Senior Vice President of Human Resources, GE

Sixty-eight percent of corporate recruiters say that it is difficult for their organizations to manage millennials. Given that millennials will account for 75 percent of the workforce by 2025, it’s time to get used to their work style.

Annual reviews aren’t going to cut it for this generation. They’re looking for continuous coaching and support, not yearly check-ins. Companies that want to be on the front lines of innovation should think seriously about changing their performance management processes to meet the needs of millennials.

Performance reviews aren’t going away, but they are changing. Annual performance reviews take too much time, have too many rules, and are wildly unproductive – even counterproductive at times. Instead, frequent feedback and microfeedback are on the rise. You’ll be shocked at how much engagement, happiness, and productivity rates can skyrocket when you adopt a continuous feedback system: 78 percent of employees say they would work harder if they felt their efforts were better recognized.

A version of this article originally appeared on the iRevü blog.

Michael Heller is the CEO and founder of iRevü.

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Michael Heller has 20+ years of experience in strategic human resources, talent management, and technology consulting. As an HR executive at Washington Consulting, Digital Management, and Deltek, Michael led teams to develop innovative human capital management programs and initiatives. Previously, Michael held a variety of positions at American Management Systems and Booz Allen Hamilton where he executed on talent acquisition, total rewards, performance management, strategic HR partnerships, and philanthropy strategies. Michael serves the community as a board member of Teardrops to Rainbows, an organization dedicated to supporting the families of children with cancer. Michael has a master's degree in human resources from Georgetown University and earned his bachelor's degree in economics from the University of Connecticut. Michael resides in Gaithersburg, Maryland, with his wife and daughter. He enjoys cooking and college basketball.