By: Ron Guest, Senior Partner, TwoGreySuits  www.twogreysuits.com

This is no joke, companies are moving away from the annual formal performance review and the ratings that are usually associated with that process and Managers and employees couldn’t be happier!  In my career as an HR Manager, Executive and Management Consultant, I have seen many managers who are neither good at doing annual reviews or like the idea of formal annual reviews, but why have they lived on for so long?  It has been the only feedback tool for some Managers and it serves as a basis for any pay treatment going forward.

The current thinking is the antiquated formal annual review actually works against a culture of regular open and honest constructive, reward and positive feedback. It gives some managers a convenient excuse not to provide ongoing performance feedback during the year.  Putting a label or a number on a person’s performance is often degrading, humiliating and demotivating to employees. So, what do we do to provide valuable performance feedback to employees?

Ok, let’s back up a minute, why in the first place do we even need to do provide job performance feedback to employees, especially if they are already doing a good job?  There are many valid reasons, first, every company has their own unique culture, in terms of how they do business, how they treat suppliers, customers, employees, other stakeholders. In other words, good leaders want things done a certain way which is consistent with business plans and the culture or the ‘how’ things get done in a business. It is the Manager’s job to know how things are to be done in terms of quality, efficiency, timeliness, etc.  We provide employees feedback in an effort to shape their behavior to the way the company prefers to conduct their business. (this is a way companies can become strategically competitive – by having employees do the same things much better than competitors do) We observe how an employee behaves in certain situations and then provide feedback to help them either continue what they are doing well (positive feedback) or to change how they are doing it, to a better way provided by the Manager. (constructive feedback)

What is currently replacing annual performance reviews is a process of ongoing regular feedback often via informal 1:1 manager/employee meetings. This has several advantages in that we can correct behavior or reinforce behavior at the moment it occurs vs. waiting for months to document in a formal review. Additionally, based on my experience, when a company adopts a process of regular 1:1’s with employees, they begin to look forward to it as a means of discussing any things about their jobs in a non-threatening and safe environment where neither party is trying to ‘assess’ the other.

Here are other sound reasons why ongoing job performance feedback (not annual reviews) for employees is important in any business, big or small:

• You can manage to goals more closely with timely feedback
• Employees want to know where they stand
• Performance shortfalls are identified and corrected much quicker
• Achievement oriented (potentially top performing employees) want and value constructive feedback
• Communications are improved with manager and employee
• There is a stronger basis upon which to determine pay increases
• You can identify high potential employees much quicker
• Employee retention improves as a function of the healthiness of the employee/manager relationship

In the People Management section of our Performance Management module in the HR Power Centre, we have a document (Monthly 1:1 Process) outlining how to implement a 1:1 process for any business. Non- members can contact me @ [email protected] for their complimentary copy.