Revamping the Annual Review
In this issue we consider how some firms are tweaking their employee review process, as discussed by Rachel Emma Silverman in her September 6, 2011, Wall Street Journal article, “Yearly Reviews? Try Weekly.” A recent survey of 500 firms found that most – 51% - conduct formal, comprehensive performance reviews annually, while an additional 41% conduct them semi-annually. However, a new trend is developing. A number of firms are finding it more useful to de-emphasize the major annual review, augmenting or even supplanting it with far more frequent mini-reviews.
Many business leaders now perceive distinct drawbacks to the large-scale performance review: They are very time-consuming. Managers and workers must schedule large blocks of face-to-face time to conduct these reviews, and both participants generally devote even more time to completing related paperwork. They can be intimidating. Infrequent comprehensive reviews become a “scary,” high-stakes, high-pressure rite of passage for workers. Perhaps most importantly, traditional reviews are by their nature overly ambitious. They are so flooded with information — appraising past performance, setting future goals, addressing compensation — that workers don’t absorb it all. Instead, they dwell on criticisms and tune out constructive suggestions for improvement. Both small and large companies are experimenting with more frequent reviews.
Grasshopper LLC, a 50-person provider of virtual phone systems, has turned away from large-scale reviews. The firm tried quarterly reviews, but saw productivity diminish and apprehensiveness rise as workers spent 4-8 hours each quarter writing their self-assessments. Instead, managers and employees now meet biweekly one-on-one for 30-40 minutes to discuss performance during the prior two weeks and set goals for the current period. Issues both large (“I want new job responsibilities”) and small (“Can I move my desk?”) are also addressed. Grasshopper’s leadership is pleased with the impact of these mini-reviews. The more frequent meetings create less pressure, and tensions have decreased between employees and managers.
While biweekly meetings are time-intensive for managers, the new approach emphasizes that regular communication with workers is the core of a manager’s job. Another advantage of the frequent mini-reviews is that they have a more real-time feel. There are fewer surprises, which makes them much less intimidating. Facebook retains semi-annual formal reviews, but encourages all staff to solicit and provide near-constant feedback after meetings, presentations and projects. Facebook’s current approach expands the vertical manager/worker feedback channel to foster prompt and brief exchanges among all co-workers. It is no big surprise that Facebook is using technology to facilitate its feedback process. Through the team-network software Rypple, similar to Facebook’s own product, each of Facebook’s staff can approve or disapprove of any colleague’s efforts (“stop interrupting customers” or “great presentation at the last meeting”). The software permits Facebook’s managers to pull summaries of this feedback when considering performance, pay and promotions.
The trend toward more frequent performance reviews is by no means universal. But forward-thinking companies are finding that frequent feedback opportunities between managers and staff can ensure their closer coordination and more efficient progress toward the firm’s objectives. Better that the captain makes frequent course corrections than to discover too late that a neglected crew has headed the ship for the wrong port. Moreover, in leaner economic times, when workers are asked to do more with less, frequent but encouraging feedback can demonstrate a firm’s concern for their professional satisfaction and its investment in their success. Please let us know what you think of these ideas. We look forward to dialog with you — and to better times.
