Many companies are aiming for a more open culture, where people feel comfortable giving both good and bad feedback that isn't part of a formal performance review.

The annual performance review has been a fixture of the American workplace for decades. But in our fast-paced information age, employees seek feedback more frequently. That's why some employers have begun experimenting with real-time employee feedback and other alternatives to the annual review.

Here's what to consider as you rethink how you evaluate employees.

The Downsides of the Annual Review

A common criticism is that the annual review doesn't deliver feedback often enough. If an employee needs to improve some aspect of their job, they should be getting that information when the performance issue is observed, rather than during an annual review. Not to mention that when all the negatives come out at once during the annual review, it can be an overwhelming, morale-crushing surprise.

At the same time, if an employee is doing great work, why wait to let them know they're appreciated? Millennial workers in particular prefer more frequent feedback, a factor in the shift away from annual reviews.

Annual reviews are also time-consuming. According to the Harvard Business Review, Deloitte calculated that its managers were spending two million hours a year on annual performance reviews. Deciding this time could be better spent elsewhere, they scrapped their old system.

Regular Manager Feedback

Encourage managers to give formal feedback more often, for example holding 15-minute performance meetings with employees every week or month instead of a long session once per year.

According to Fast Company, PricewaterhouseCoopers has developed an app through which employees can request manager feedback instantly. Using tools like Zugata, you can design something similar for your organization. This way, if an employee is unsure of their performance at any time, they can reach out for information.

Peer- and Self-Evaluation

Peers can be a valuable source of feedback in the workplace, bringing perspectives that managers might not see. So consider if peer evaluations may be a helpful addition to your talent management process. You could also ask your employees to rate their own performance. When employees are focused on their day-to-day work, they may not take the time to reflect on what they're doing well and what they can improve. If an employee realizes they're making a mistake on their own, they may be more motivated to improve than if a manager brought up the issue. It could also help them realize what they want out of their career and how they'd like to grow within the organization.

Encouraging an Open Culture

Many companies are aiming for a more open culture, where people feel comfortable giving both good and bad feedback that isn't part of a formal performance review. Doing away with a strict performance review cycle can help encourage this.

Set up channels for employees to give real-time feedback. When someone sees a coworker go above and beyond, they should be encouraged to point it out to a manager. For a little extra motivation, you could give a small, weekly prize to an employee who received good feedback. Just ensure that any rewards-based process is applied consistently throughout your workforce.

Above all, this kind of real-time employee feedback should be framed as a way for your staff to improve their performance and their careers. Consider consulting with experienced counsel or an HR professional for best practices on how to implement and document an effective feedback process. This way, employees will actively reach out for advice rather than dreading their annual performance review.


Tags: Employee Development