There aren’t many people – employees or managers – who would say they look forward to annual reviews. It means more work for managers and evaluating employees’ performance over the course of a year. And it’s inevitable that employees will have a little anxiety about how they are rated, regardless of whether they think they have been a star performer.
But reviews, in general, serve a purpose. Some companies, like Adobe, Dell, Microsoft, IBM, Gap and General Electric, have replaced annual reviews with more frequent, informal check-ins between managers and employees, according to Harvard Business Review’s “The Performance Management Revolution.”
While the effect is debatable, a case can be made both for and against annual performance reviews. We deliberate below.
- One-on-one feedback is mandated
Annual reviews set aside a time and place for you and your manager to regroup on the happenings of the last year and set goals for the following. In today’s modern workplace, it’s rare to get a free moment to even think about your performance, never mind sit down and assess it with your manager. This will give you a clear understanding of where you stand and where you should head over the next year.
- Review access is company-wide
Because your immediate supervisor is likely the one who evaluates your performance regularly, upper management may not fully understand what impact you have on the company. Reviews provide information for higher-level managers that don’t interact with you on a daily basis. Additionally, if your department structure shifts or a new manager comes on board, your annual reviews will be stored and accessible for this leadership to access.
- Long-term improvements are documented
Especially if you stay with one company for a few years, annual reviews give you the opportunity to see how you’ve improved over time. It’s satisfying – and motivating – to see how far you’ve come over several years. Review processes provide structured feedback, often with ratings, so it’s easy to compare performance from year to year.
- It’s only once per year
It’s hard to remember what I ate for lunch yesterday, so how can we expect managers to remember how each of their employees performed a year ago? Because of this, annual reviews often become a review of the last two months instead. It may not be conscious but the accomplishments and failures that happened most recently will be what is top of mind for managers come review time.
- They sometimes provoke unnecessary anxiety
According to a survey conducted by TriNet and Wakefield Research, 22 percent of millennials have called in sick because they were anxious about receiving their review. In the aftermath, 15 percent have cursed and another 15 percent have cried. And it’s not just stressful for employees. Managers find it demanding to complete in addition to their regular job duties.
- People are biased
Because humans complete reviews, they’re not as objective as we may think. While numeric ratings incorporated into review documentation help make performance assessments uniform, managers may have different expectations or definitions when it comes to “average” or what a 3 out of 5 means. No matter how hard we try to take out subjectivity, assessments may vary depending on the reviewer.
When it comes to annual performance reviews, the bottom line is that they may have a place in some companies, but not others. And if they are executed, the way they’re done will make a difference to employees. Incorporating peer feedback, tracking workplace learning, adding more frequent check-ins or quantifying ratings may help employees get more value out of these assessments. The company culture will likely dictate what works best for your organization. Listen to your employees and managers – then give it a go!