Is it Time to Replace the Performance Review?

Today’s HR professionals have seen the emphasis on employee performance metrics shift from the annual or twice-yearly event to evaluation systems that are driven more by data. These data-driven systems allow employees to be more effectively evaluated on things such as meeting their personal job goals, to how they interact with others in a work setting.

This summer, IBM announced that it would cease using performance reviews and instead have employees check in more often with their managers and supervisors for feedback throughout the year. If priorities need to change or workloads shift, adjustments can be made more effectively by checking in more often, so the theory goes.

In a recent study done by management research firm CEB, it was discovered that a manager will spend approximately 210 hours annually on activities directly related to employee performance reviews. Further, such reviews can leave employees demoralized afterward. As performance reviews became more complex over time, it made the system even more cumbersome. IBM, GE, and other firms have decided to scrap annual reviews and replace them with “touchpoints” where employees and managers discuss goals and track progress on a more constant basis.

For employees, having input and feedback from management more frequently makes them feel more valued.  Armed with a greater sense of what they need to accomplish in order to advance their careers, it gives them less incentive to go look for a job at another company.

Of course, not every company may feel the need to get rid of the annual employee review. Certainly, however, increased effectiveness, less wasted time, and improved employee morale are all good reasons to consider going to increased feedback between managers and employees.

At NetPEO, we work with our clients to provide for all of their outsourcing needs. We provide a needs assessment that will show how we can offer your small-to-medium sized organization with what you need. We offer payroll services, employee benefits, risk management services, as well as brokerage services.

Find out why we are one of the top PEO firms in the business. Contact us today to schedule a free assessment today. Let NetPEO help you with all of your employee needs.