How to End the Annual Performance Review

Companies like GE, Deloitte, and Microsoft are no longer using annual reviews to manage performance. Instead, they use modern ongoing performance management tactics such as feedback loops and OKR goals (Objectives and Key Results) to accelerate results. Formal annual reviews are problematic for many reasons: they are skewed by manager biases, focus on past issues instead of future improvement, and are demotivating even to high-performing employees. Most importantly, they are ineffective. End outdated reviews in your organization and switch to the new wave of performance management using the tips outlined below.

Implement Ongoing Performance Management

There are four key elements of ongoing performance management:

  • Effective Goals Management: Align teams with your company priorities (outlined in your company strategic plan) by using a goal setting method like OKRs. The Key Results of OKRs are set using SMART goal criteria, which creates measurability so managers can track performance on an ongoing basis. You can then coach and provide feedback for teams. OKRs not only support ongoing performance management, but also data-driven performance management for unbiased and effective continuous feedback.
  • Coaching: Maintain an ongoing feedback loop so managers can course-correct and coach teams. Use tactics like one-on-one meetings (the most effective business management tactic of all time) to check in with teams on a weekly basis. This will drive focus, clarity, and ultimately, employee engagement.
  • Development Planning: Historically managers only discussed development planning once per year in annual reviews. this is ineffective. managers should discuss developmental plans on an ongoing basis to keep employees motivated. Regularly discuss development planning using your feedback loop to encourage high performance while also supporting retention efforts.
  • Praise and Recognition: Praise keeps employees engaged and focused on achieving objectives. Yet, praising employees for their performance weeks or months after they achieved results in an annual review is ineffective. Acknowledge employees wins regularly and in a timely manner. Implement recognition in your one-on-one meetings and other methods of feedback exchange.

Our free eBook titled The End of Performance Reviews explains in greater detail how to effectively implement management practices like one-on-one meetings and OKRs to achieve results. It also details how to select a test group, train managers on ongoing performance review, and finally get rid of outdated, ineffective annual reviews. Download a copy to end annual reviews in your organization, and use our additional goals management resources to further improve your company performance.

What else? Have you gotten rid of formal annual reviews in your organization? What are the greatest benefits you’ve experienced after switching to modern continuous performance management?

Do you manage a company or teams (either as a CEO, a senior executive, a middle manager or even a front-line manager)? Do you set and track objectives? Does aligning employee performance to business goals matter, and are you responsible for driving results? If so, please check out a live demo of Atiim OKR & Goals Management Software and we’d love to hear what you think about it. Thank you!


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