Back to blog

Has the annual review had its day?

A waste of time, stressful, outdated are just some of the descriptions we hear when we speak to clients and candidates about annual reviews. It seems many employers and employees don’t find the topic of the annual review very engaging. Yet, as we discussed in a recent blog, companies with strong employee engagement rates experience 87% higher staff retention, 17% higher productivity levels, 20% higher sales and 19% increase in revenue. So why don’t annual reviews seem popular anymore?

An annual review isn’t enough. Most organisations exist in a fast-paced, highly competitive environment. Leaving something as important as staff reviews for a year often means so many things may have changed, that the goals set a year ago have become seriously outdated. Providing feedback on an individual’s performance is a key objective and an annual review just doesn’t cut it.

In our experience, people are more eager for feedback than ever and many (particularly younger people) want to receive feedback regularly, even daily. It makes more sense for managers to adopt a coaching style approach where on the spot performance feedback can be timely, relevant and effective in motivating an individual to repeat what they do well and make improvements where necessary.

CIPD research revealed that almost 70% of managers surveyed felt uncomfortable communicating directly with individuals on their team and over a third (37%) avoided delivering feedback about an employee’s performance that they might respond badly to. No surprise then that many annual performance reviews don’t seem to work for either party. Communication and genuine praise are key to employee engagement and workplace happiness improved productivity and increased profitability. It really should be a fundamental part of a managers personal development programme to keep their coaching and communication skills up to date.

You know the annual review process is failing when people start to complain about it being a ‘paperwork exercise’. Most people hate paperwork and it might be time to ditch the paper and adopt a technology-based approach and use modern HR procedures such as staff surveys and more flexible, ad hoc processes that provide the timely and relevant information today’s business world needs.

Ditch the annual review?

Should you ditch the annual review completely? We think not. There is still a place for a well-planned annual discussion provides an opportunity to invest quality time to review how far an individual has developed in the past year, take stock and reflect on the longer term. Well executed, an annual review can be motivational and add value for everyone involved.

Add to the management mix regular on the spot feedback and you have the perfect combination of communication tools to ensures team and individual performance is aligned with the organisation’s goals and objectives.

Employers and candidates tell us that First Base is their first choice for help with their recruitment requirements and their personal career progression. If you would like to know more about how the First Base team could help you, contact us on 01453 755330.

FAQ’s

Explore FAQs
Are you looking for a talented team member?

Find Talented Staff
Job resources

Download Our Guides