The Dreaded Annual Review -- 5 Ways To Fix Them

While reviews come and go, all too often behaviors, and performance, don't change. So it makes sense that companies are now asking, why continue this painful and often pointless exercise? Companies of all sizes, but certainly noticeably industry-leaders like Gap, Adobe and Deloitte are eliminating them altogether.

SAP recently made its own headlines on this as we pilot using our SAP SuccessFactors continuous performance management capabilities. The headlines have been pretty provocative, but what I've written here is our reality. It's less about "ditching" an annual process completely and more about ongoing and in the moment feedback. I like to think of it as similar to taking golf lessons. The point is to keep making the adjustments you need to improve, and not having your instructor wait six months to tell you your swing is all wrong.

The answer to effective performance management in my view is not doing away with reviews altogether. It's institutionalizing effective, actionable feedback - something managers and colleagues should contribute to throughout the entire year. Here are five ways to make it work.

Understand the motivation
Before you start to appraise an employee's performance, you need to understand both their behaviors and your role in shaping them. People don't always do things just because you ask. Most people do things because they have the capabilities and confidence to be successful at them. So your job as a manager, and even more so as a leader, is less about developing people and more about creating an environment where they can develop themselves. Head into the review process with the knowledge that being a great leader is not about what you do, but rather what you inspire and enable others to achieve.

Get on the same page
The foundation of effective feedback is establishing clear goals and expectations. It may seem obvious that people need to understand expectations in order to meet them, but it's easier than you might think to cross signals on what someone's job goals are. Discussing goals and progress should be a regular event or you'll likely find you're nowhere near on the same page. A good way to measure whether you are aligned is to ask people on your team what their top five priorities are and compare that to what you think they should be. Is it a match? Make this exercise a jumping-off point to discuss where your expectations align and where there may be inconsistencies - and then agree on what to do about it. 

Look ahead, not just back
Resistance to feedback is natural when we don't believe it comes from someone who has our best interests at heart. Make knowing what people on your team want, what they are good at and where they want to go in their careers a priority when assessing performance. Look for ways to tie your assessment not just to performance, but to future development.

No surprises
As a manager, you are failing your employees if you hold out until an annual review to level-set on things that are detrimental to their career. If an employee is on the wrong path, don't wait weeks or months to let them know. Most of us don't see our own shortcomings. Don't only focus on the negative though, or you'll lose your audience right away. Talk about what is working, and encourage employees to focus on those areas. I think we've moved away from worrying about how to improve what people aren't good at; instead, focus on having them spend time on what they do well so they'll get even better.
Support success
I talked about development being an individual responsibility with leaders owning the creation of a culture that supports learning and growth. Make sure people on your teams have access to resources, training, coaching or other things you can provide to help them improve their performance and develop in their careers. Today we are all lifetime learners and teachers. Connect people to each other and to resources.

Today we have the technology to support effective, "always on" feedback loops. Think about how much more successful you are when you have a chance to course correct along the way and not have to wait until an entire year is behind you to find out if you were doing the right things and doing them successfully. Ultimately though, it's about the old adage that says "people don't leave companies, people leave managers." Those of us who lead have the responsibility to enable all-in - committed, motivated and inspired - people. If we fail, it's our own performance review we should dread.