Should You Get Rid of Annual Performance Reviews?

annual performance review

In theory, the idea of annual performance reviews is a good one. Once a year, you’ll meet with each of your employees to let them know everything they did well, and everything they did poorly. That way, employees only have to hear negative feedback once a year; and you as a manager can have a one-and-done tough conversation. 

But in reality, annual performance reviews end up being a dreaded occurrence. Oftentimes, employees feel blindsided, after learning they’ve been doing something wrong or poorly for an entire year before it was addressed. And managers suffer by only having an opportunity to provide constructive criticism in a structured manner once per year, versus on a continual basis. 

As Brian Westfall of Capterra explains, “Close to two-thirds of employees and managers agree that the typical annual performance review process is outdated and ineffective — contributing to a poor employee experience. Unless you make important changes today, your workers will be checking a time-intensive box every year that makes little to no improvement on your business.”

As a result, some companies — like Netflix and GE, and even The Claremont Club — are moving away from annual performance reviews in favor of quarterly, monthly or bi-weekly meetings that allow for more frequent feedback and continual improvement. 

In fact, this is a change Club Solutions Magazine made recently as well. Instead of doing annual performance reviews, we do more formal quarterly reviews, where employees fill out a self-evaluation form and then meet with their manager to discuss. In addition, more frequent meetings occur every two weeks to ensure the employee is on track and performing as expected. 

Questions asked in the quarterly self-evaluation include: 

What went well this quarter?

What did not go well this quarter?

What areas do you feel are in need of improvement?

What tools are required to achieve this improvement? 

What are your goals for the next quarter?

Since making this change, team members have voiced their support; and managers have found the change beneficial as well. 

As Thomas Koulopoulos writes in Inc. Magazine, “The rate of progress, market and technological change have made a yearly review nonsense. Using feedback on performance to course correct once a year, or even twice a year, is akin to trying to navigate a minefield by reviewing your performance after you’ve crossed it. It’s not entirely ineffective for some, but there will be far more casualties among those who need feedback in the moment.” 

Does your fitness brand still do annual performance reviews? If not, what prompted you to make the change, and what format have you moved to?

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