Annual employee reviews are antiquated and counter productive. They are fear based assessments of employees that create animosity and waste a ton of energy. And the truth is that most managers hate doing them and as a result are not very good at them.
Let’s start by talking about what actually is the point of a review. It is generally perceived as a way to annually inform an employee if they are living up to the managers or companies expectations, report the good, bad and ugly of their efforts, to suggest what the expectations for either their continued performance or change in performance should look like and often address a pay increase.
But in reality reviews are only helpful to everyone if they are done on a regular – yes daily or weekly – basis. You should be communicating what you expect and how things are going from moment to moment. Manager/employee relationships are relationships like all others in life and no healthy relationship waits to be reviewed annually or it becomes damaged. When you can begin to shift into an ongoing, day-to-day review process, annual employee reviews lose their fear value for both the reviewer and employee.
I call them “daily reviews” and here is why they are so effective:
- Your employees get feedback daily from you and understand what you expect from them everyday. It builds trust and they will ask for your input in areas where they know they are coming up short.
- It gives you an opportunity to express your intentions for business and get your team on board. When your team understands what your primary intentions are, they can make decisions based on those intentions. This frees you up because your team knows that their choices and decisions in every situation should drive the results toward those primary intentions. It empowers them to make good choices.
- When you have annual reviews it is like a pressure cooker building steam, ready to explode – you wait and wait, building up things you will “have to tell them at their review” and your employee just keeps making the same mistakes. This is a recipe for drama.
- Doing it daily removes the fear from the workplace if you speak respectfully. As you see something good happening you praise your employee, right now and if you see a problem, you address it with another solution, right now. This helps people to feel safe that you appreciate their work and will be honest and solution oriented when you don’t.
- There are no surprises. No one will be shocked if you are doing daily reviews. This helps avoid drama in the workplace.
- You can leave work and leave behind your frustrations. When you do reviews daily, you are actively addressing that employee who drives you nuts and you more quickly help them grow or remove them from your team. At the end of the day you know you have taken action and you can more easily leave your work at work.
- Daily reviews shift a manager/employee relationship from one of a “boss” holding power over an employee – like an adult controlling a child – to adults talking about what needs to happen at work to progress and be successful.
If you are not comfortable doing daily reviews then this is your opportunity to review your self and ask where you need support and tools for growth. Fear and lack of effective communication tools are the primary reasons for avoiding daily reviews. Avoiding daily reviews is also a way for managers to indulge in drama by perseverating on the issues their team has. This is one of the primary reasons that I provide 1:1 sessions focused on giving managers tools for communication and engagement. Many managers never learned effective communication tools and have habits that limit our potential – being self-aware is vital to growth.
For employees who are concerned about their rate of pay, the annual employee review has come to mark an expectation that this is the time when they will either get a raise or not. When a company has no plans for annual raises, it puts a manager in the position of avoidance of annual employee reviews – “I don’t want to do reviews because I can’t give raises.” Transparent, respectful communication about how and when raises are given should be happening as you know more information. Tell them any day of the year where they stand. They work hard, be honest about when and how raises are given and stick to it. If there will be no raises this year, employees should understand that and why. They should understand what they can do to ensure a raise when it is available.
Then when you give a raise, don’t attach it to an annual review – attach it to a thank you, you are a great team member. This will diffuse the expectation that they will get a raise every year because time has passed and place the emphasis on the qualities of their contribution to the team. Maybe they get two smaller raises throughout the year to keep them motivated. If they need to make improvements to get a raise be sure you have been clear all along so they are not surprised and know exactly what you expect.
Lastly, take notes all along. Create a system that allows you to easily make note of significant conversations along the way. The notes should be short but specific, put in the employee file and dated. These notes in an employee file are either the documentation that will help you when it’s time to remove them from your team or they will be the support you need to get a great team member a raise.
Forget annual employee reviews! Honest, direct, transparent communication every single day is a what your team needs. They will respect and appreciate your insights and know where they stand and you will feel more empowered as your team is making daily improvements.