Four Alternatives to Annual Performance Reviews

Photo of 5 Star Performance

Photo of 5 Star PerformanceIt’s that time of year when the days become shorter and the leaves begin to change colors. And while I love the cool crisp air and pumpkin-spice everything, it is also a sign that something spooky is lurking around the corner. No, not Halloween—it’s annual performance review time. The ghosts and goblins of goal-setting past are ready to remind you what a long and exhausting year it has been.

This is a perfect year to consider an alternative to the annual appraisal. The pandemic flipped 2020 upside down, and the goals you set in January are likely unachievable or simply do not apply to the current business needs. Additionally, most performance appraisals are traditionally tied to bonuses or merit increases. If your business is not in a position to offer bonuses or merit increases this year, continuing with the traditional performance review will be like salt in the wound for high performing employees. It will be considered an exercise with no beneficial outcome. We’ve all had to pivot and identify new ways of working this year, so it’s a great year to toss out the old 5-point rating scale and find a more impactful use of your time.

Here are four alternatives to the traditional annual performance appraisal:

  • Feedback, Focus, and Future Chat—During a Feedback, Focus, and Future Chat, you take a more informal approach to the performance appraisal conversation. There is no rating scale and no formal review forms to fill out. While you still cover the same ground as you might in a formal review, you do so in a conversational way that is designed to create alignment between expectations, priorities, and a plan for the future. These conversations are less about critiquing performance and more about ensuring your employee is set up for success in 2021 (and beyond). It is particularly important to discuss the employee’s career path, stretch assignments, and growth opportunities. Keep looking forward and reinforce your commitment to their future with the organization.
  • Self-assessment—Keeping with the trend of thinking toward the future, giving employees an opportunity to improve their self-awareness through personality/behavioral assessments may help them accelerate their growth. They may uncover hidden strengths they can leverage more effectively in their current role or development opportunities that have been holding them back from moving forward. Providing an opportunity to learn more about oneself is a great way to open a new conversation about how you can help support your employee’s development path.
  • Check-in—Many organizations have replaced annual performance appraisals with consistent, recurring check-ins. For example, on a monthly basis, set a meeting to set goals and priorities for the month ahead, while also reviewing progress towards the last month’s goals. Engaging in these discussions formally on a monthly basis helps the employee receive more frequent feedback and pivot quickly to address performance or behavioral issues that arise. In addition, it’s another opportunity to provide nearly real-time positive feedback for achievements that may be forgotten by the end of the year.
  • 360-degree Assessment—If you want to refrain from a single overall performance rating for the year, but still feel it’s important to gather quantifiable feedback, a 360-degree assessment may be a viable alternative. In a 360-degree appraisal, the employee seeks formal competency-based feedback from their boss, peers, direct reports, and other key stake holders. The results of the 360 will help the employee identify the strengths others see in their behavior as well as areas in which they can improve. It also provides a unique level of specificity that makes goal-setting a bit less cumbersome. For example, an employee may be told that they need to be more collaborative during a performance appraisal, however the 360-survey will show specifically which behaviors related to collaboration are the highest priority for development. In addition, the 360 report will identify which rater category is in most need of their attention (i.e. Direct Reports vs Peers).

With as much change as we’ve all experienced this year, the old routine may seem like a welcome comfort. However, there is always a danger with sticking to a process simply for the sake of tradition. We all tossed tradition aside in March, so perhaps the formal performance appraisal should be reconsidered as well.