Are Annual Performance Reviews really beneficial?

Annual Performance Reviews are three words that can either be viewed positively or negatively by an employee. Either way, the review process is a standard procedure given to your employees, to tell them how they’re performing in their job role. But should an annual performance review be the only opportunity to tell your staff what they’re doing well in and what they’re not? Have you thought about what implications it may have on your employees overall well being and confidence?

According to statistics, one in five employees don’t feel confident that their manager will provide them with regular, accurate and constructive feedback. And did you know that 30% of employee performance reviews can actually lead to decreased performance? Despite these statistics, employers shouldn't stop monitoring employees efforts, or refrain from giving feedback. 69% of employees say they would work harder if they felt their efforts were better recognised. Some employers are now doing more regular performance reviews in order to motivate their employees more, which 78% of employees say being recognised for their efforts actually motivates them more within their job.

So are annual performance reviews really beneficial? We discuss the pro’s:

It’s a chance to give the employee a thorough overview

With one annual review, you are able to give the employee a thorough overview of their strengths and areas they can make improvements in. It’s also a fantastic way of setting goals for the year ahead which can really motivate an employee to work hard to achieve those goals. By setting clear and specific goals, it allows the employee and employer to get on the same page and achieve things together as a team.

It’s a chance to be able to make adjustments in a non-threatening way

When an employer confronts an employee on negative behaviour, it can sometimes result in a negative attitude which could affect the whole company. By having a sit down conversation, you can resolve these issues in a non-threatening way by focusing on the positives of their performance, instead of solely focusing on the negatives. A good employer is one who can give an adjustment in a non-threatening way and follow it up with positive feedback; this way the employee will be more motivated to work hard to improve on the areas that need adjusting.

It’s a way to document the long-term improvements that an employee is making

When an employee has been working for the same company for a number of years, it can be easy to forget about the growth that employee is making and there is a threat that when a new manager comes into the company, they may not know about that employee’s progress. That’s why it’s always extremely useful to have a document which an employer can keep adding to, in order to give more accurate feedback.

Now how about the con’s of an annual performance review?

Many employees don’t receive this feedback

Believe it or not, many employees don’t get this feedback; especially if they leave before the annual year is up, meaning they will have received zero feedback. Lack of feedback is often considered as lack of care for the employee, something which could force the employee to leave before the year is up.

They’re not an accurate representation of the year

It is virtually impossible to cover an entire year into one document and one employee can complete a lot of work within that time which can mean it’s not an accurate representation of the achievements they have made that year. If an employee is consistently good with their performance, but makes an error 60 days leading up to their Annual Performance Review, what typically stands out? Negative actions or poor decisions tend to be the focus of the review, which is incredibly unfair and it means it isn’t really a complete review. It ends up being a review on “the last two months”.

There’s a strong chance the employer hates completing performance reviews

Completing an Annual Performance Review can take up a lot of time, which sometimes an employer can’t afford to commit to due to everything else they have to do. Annual Performance Reviews can sometimes show a manager's laziness and lack of interest in that employee, plus if an employer hates completing paperwork, then the feedback is essentially just a waste of time, energy and paperwork.

Goals set and agreed are rarely reviewed by management

Goals will be set and agreed by the manager for their employee to work towards during the year. However, these goals are usually not followed up or reviewed meaning the employee becomes unmotivated to complete them and has an impact on an employee’s performance.

What works for your employees? Do you prefer to review your employees weekly, monthly or every 3 months? Or does it work for you and your employees to have yearly reviews? For advice on how to provide feedback to your employees, contact us on 0808 172 9335.

Engaged People are dedicated to helping you get the most out of your biggest asset; your people. We can help your existing HR team, or provide you with a human resources service in order to ensure that your people become Engaged People. Get in touch to find out more.