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4 Reasons Your Annual Performance Appraisal is a Huge Waste of Time

Stuart Hearn
Stuart Hearn

The most forward-thinking organizations are unafraid to improve their performance reviews.

How enamored are you with your existing performance review process? Do you feel the whole system is streamlined and efficient? Or are you one of the many managers who feels a huge sense of dread as the yearly appraisals approach?

It has been reported that, remarkably, the average manager spends in excess of 200 hours each year on performance reviews and activities related to the appraisals. In case you were wondering, this amounts to nearly a whole month of work. If you are getting stellar results from the process, this time might just be worth it. However, if you see few performance improvements within your business, and you can tell your employees are less engaged with each passing year, it might be that performance appraisals are one of the biggest time wasters in your organization.

Nobody is suggesting you throw the baby out with the bathwater; performance reviews are a great opportunity for employees and managers to catch up, exchange feedback, develop trusting relationships and discuss objective progression. There are ways to drastically improve your performance reviews. Your employees don’t have to spend days in a state of distraction, concerned about what they’ll encounter during their annual performance appraisal. All you have to do is avoid the following pitfalls and you will be well on your way to creating an inspiring and efficient performance management system.

1. Stop trying to achieve too much in one sitting

You’re only human. You and your employee can only achieve so much in one meeting. When you consider how much has happened in a year (how much the employee has learned, what went wrong, their successes, accomplishments, frustrations, and so much more), it can get a bit overwhelming. For this reason and many more, you should consider taking the pressure off your shoulders. Don’t try to get it all discussed in one meeting. This isn’t fair for you and, importantly, it isn’t fair to the employee you are appraising.

Consider doing what many other top companies are doing and moving to more regular performance discussions, which have been described as the number one performance management tool. Monthly discussions ensure you remain up to date with your employees, and a more detailed understanding of performance means you will be in a better position to facilitate and improve future performance. This turns a dreaded, ineffectual annual review meeting where you are simply going through the motions into a series of helpful, meaningful conversations.

2. Stop using performance ratings

Performance ratings are a performance management trend that is coming to an end. Large companies are turning their backs on them, aware that they only demotivate employees by triggering a fight or flight reflex in the brain that decreases subsequent performance. If you’re still using ratings, it will be useful to question: do they actually help, or are you just holding onto them because they have always been a part of your evaluation system?

You might be keeping ratings around because you think they’re a fair, objective way to inform pay decisions. However, once you start analyzing the ways in which these numbers are arrived at, it becomes clear that performance ratings are not entirely objective. In fact, they’re subject to a number of human biases, meaning they are not a reliable way of measuring performance, effort, and improvement.

Instead of using numerical ratings, you can use more qualitative means of measuring performance, including achievement against objectives, demonstration of company values, enthusiasm for the role, and eagerness to develop and advance.

3. You’re failing to look to the future

During your performance appraisals, how much time is spent looking backward, assessing the past? While it’s certainly important to learn from our mistakes and discuss what went wrong, retrospection will only get us so far. After all, the past can’t be changed. It’s already happened.

So instead of turning reviews into postmortems and covering every detail of the past year, you’d be better served looking to the future. Take any lessons learned and apply them, with the coming year in mind. This will give you and your employees an opportunity to discuss upcoming priorities and performance requirements, while covering personal development actions and what will be needed to accomplish these goals and actions. This will be far more helpful — and much more inspiring — than a painstaking rehash of the previous period.

4. Your whole performance review system is just a form-filling exercise

In your organization, how much of your time is spent filling out performance review forms? Are these forms helpful? Do your employees take them seriously, or do they mindlessly tick boxes in an attempt to get them over and done with, so they can get back to work?

One of the biggest criticisms of performance appraisals is that they tend to become tedious form-filling exercises. Instead of investing time and effort into your forms, it would be wiser to place the focus on meaningful dialogue. Though a simple form might be useful in terms of providing a general outline, remember that you are looking to solicit and deliver feedback, give praise, coach, and plan for the future period. Only write down what is strictly necessary. It will also be helpful to discuss the forms with your employees, to see whether they find them motivational and encouraging, or whether the forms themselves need an overhaul.

Changes often take time to incorporate, but the most forward-thinking and ambitious organizations are unafraid of making alterations and accommodating effective performance management trends. By keeping an open mind, being patient, and diligently adapting your processes for the benefit of your employees and business, your company can only go from strength to strength.

Image Credit: Uber Images/Shutterstock
Stuart Hearn
Stuart Hearn Member
Stuart Hearn has twenty years of experience in the HR sector. He co-founded plusHR, a leading UK HR consultancy, and previously worked as International HR Director for Sony Music Publishing. Stuart is currently CEO of Clear Review, an innovative performance management software system.