Should Your Organization Have Annual Performance Reviews?

It's a pattern that has been around for decades. Once a year, employees gather their accomplishments and projects for the past 12 months and talk with their managers and HR representatives to plead their case of why they're a valuable asset to the company. At the end, they may get a few suggestions for improvements and maybe even a raise. Then it's back to work until the same time rolls around next year and it all starts again.

Annual performance reviews are standard in many organizations, but the way they've always been done can be incredibly detrimental to the overall morale, productivity, and engagement at a company. There's no absolute answer to if your organization should have annual performance reviews, but here are three things to improve the process:
Ask your employees. Many organizations are quick to kill traditional annual performance reviews without asking their employees. Take a survey and hold focus groups to find out what employees are looking for and the format they prefer to receive feedback. You may be surprised with the results.
Provide regular feedback. The main downside of traditional annual performance reviews is that they only happen once a year. Waiting to give feedback until months after a project is inefficient for everyone. Instead, provide employees with regular feedback. That can happen with daily check-ins or with more formal meetings between employees and managers on a weekly or monthly basis. Regular feedback addresses issues in real time and helps keep things moving forward. With a feedback schedule, the annual performance review becomes more of a meeting to provide a raise and plan steps for the future.
Build relationships. In organizations with engaged employees, annual performance reviews are a collaborative meeting instead of a scary situation where employees have to prove their value at the company. Managers and employees should work to strengthen their relationships for more open communication. A trusting and transparent relationship can remove the fear from the annual review and create a more positive work environment.

Every organization needs to consider their own employee review process. What works for one company might not work for another. Follow these three tips to improve the process and find the right solution for your organization.