Organizations are rethinking the way they approach performance reviews across multiple industries. The process that used to work well during the 80s and 90s is no longer the best approach in most cases. In this article we explore the evolution of the performance review system and some ways in which organizations are adapting to get the most out of their employees.
The Old Model of Annual Reviews
Many of us recall the dreaded annual review performance process of the past. Once every year employees receive feedback from their managers about their performance on the job and often find out whether they qualify for an annual bonus or promotion. For many, this was the only time the career discussion came up and the only time they heard any feedback, positive or negative, from their management. This deprived employees of the opportunity to make course corrections along the way and deprived the organizations of the chance to have more productive employees throughout the year.
Often, the annual review process was overly biased towards the projects and results of more recent months, and overlooked other accomplishments throughout the year. The employees who wised up to this saved their best deliverables for late in the year, and time immediately following the annual review was altogether less productive for the organization.
The Modern Performance Review
There are many reasons why the performance review system needed to be reformed. The pace of doing business has changed rapidly in the last few years. The competitive landscape across industries and the importance of ‘time-to-market’ for the success of a business had a profound impact on the performance management system as well. Organizations and employees alike prefer having a periodic performance feedback discussion. The employees are committed to making changes necessary to be successful in their jobs as much as the organization prefers having a high talent density within any business group.
The stigma attached to the annual performance review is fading, and performance discussion is no longer a dreaded annual process. Through having a periodic performance discussion, employees can more accurately and completely capture their contributions and potentially areas where they could have done better. Managers also have more details readily available to show their appreciation, and therefore reinforce the positive impact of such a discussion and share constructive criticism that will help an employee course correct. A more periodic performance review process also allows everyone to track changes against prior feedback and proactively move in a better direction.
The periodic performance review is widely successful in multiple industries. Many companies have even modernized the name so that it no longer refers to the discussion as a performance review. While the data from the review feeds into the rewards and promotion discussions, many companies have chosen to separate the two altogether in hopes of increasing the likelihood of seeing positive changes from the performance reviews.
A differentiated reward system in the presence of a finite budget for rewards is the reality and a requirement for most successful businesses. Let our team of highly knowledgeable recruiters help you embrace the use of performance feedback to up-level your talent in the greater Portland and Vancouver areas. Contact ACS Professional Staffing today!