6 reasons to ditch annual performance reviews

As the COVID-19 pandemic began, 15 percent of companies suspended annual performance reviews and performance ratings in favor of more frequent employee check-ins, according to a Sept. 21 report from Bloomberg

While 90 percent of organizations still do formal annual assessments, regular check-ins are more effective for motivating and supporting employees, according to the report. 

"Trust is the thing," Marcus Buckingham, head of people and performance research at the ADP Research Institute, told Bloomberg. "Annual performance reviews mean that you wait around for a whole year to be told that you're rated a two [out of five]. That reduces trust. If companies want to improve performance, they should ask, what can we do to make people trust us." 

Six reasons to ditch annual reviews, according to Bloomberg

1. According to the ADP Research Institute, the ideal frequency for employee check-ins is every 11 days. It is better to have check-ins right after the completion of a large task or project, since performance happens in the moment. 

2. Four percent of human resources leaders say that annual reviews accurately assess performance. Instead, review should be more focused on behaviors and skills. 

3. Annual performance reviews can often be arbitrary and vary depending on what manager is delivering them. Instead, companies can use employee success tracking software to regularly keep tabs on employee performance and check in often to set hard goals. 

4. Co-workers should also be consulted during check-ins. 

5. Regular self-reflections help employees to consider their performance inwardly, which can provide talking points for managers. 

6. More frequent reviews allow for "feed-forward" reviews, not just reviews focused on annual bonus earnings. 

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