Why No One is Getting the Annual Review Process Right (And How to Change That)

January 26, 2017

There’s no denying it - no one is ever especially enthused about performance reviews. According to LinkedIn’s CHRO, Pat Wadors, a big reason for that is because so far no one has gotten it right. That said, performance reviews are shaping up to be one of the industry’s hottest topics in 2017.  

In fact, some industry leaders are really changing  the way they look at performance, with some getting rid of annual reviews altogether, and others considering the process a only a portion of a larger performance management strategy. 46% of companies across the globe have changed their review process, with companies like Microsoft, Deloitte, Accenture, GE, and The Gap eliminating it altogether.

In this week’s Talent on Tap episode, Pat and Brendan Browne, Head of Talent Acquisition at LinkedIn, take a deep dive into the topic with perspectives from special guests Kevin Delaney, LinkedIn’s Vice President of Learning and Development, and Tremayne Bess, an Engineering Human Resources Business Partner (HRBP).

Before we go on, let’s back up and take a look at where performance reviews came from.

George Elton Mayo is considered the father of Human Resources, as he paved the way to what we recognize today as common practice. In the 1920s, Mayo measured the relationship between working environment and employee productivity. His findings resulted in managers changing their perspective from taskmasters to leaders. 10 years later, the US government recognized the importance of proper management strategies and passed the Performance Rating Act and the Incentive Awards Act in the 1950s.

Fast-forward 67 years, and performance management methodology is still being iterated and questioned. Kevin Delaney explains the pros and cons of the process, saying that there are three main challenges with the annual reviews:

  1. Its extremely time consuming. The annual review processes takes up a big junk of time, with the most time falling on senior leaders and management.
  2. Employee experience is challenged. The review process makes employees feel that they are being judged, which is hard on morale.
  3. The process kicks off at the end of the year. Review processes tend to be very quiet for most of the year, and then a large “crescendo of activity” takes place when companies are already consumed with closing the books and making plans for the new year.

As far as pros to the review process, Kevin states the “real value is conversation between managers and employees.” And while that makes sense, the problem is that data shows that only 5% of the total time is spent in actual manager to employee conversations. The majority of time is spent on gathering and writing feedback, working within the calibration tool, conducting “manager only” discussions, etc.

If companies were able to “reallocate the amount of time spent talking about employees and make more of an effort talking to employees… the outcome would be much better,” Kevin says.

So, how can we improve the performance review process?

Tremayne Bess, an HRBP for the Engineering organization at LinkedIn shares that the secret to a successful performance management system lies in “frequent and consistent” conversations between managers and employees.

He parallels this idea to a specific theory in Carol Dweck’s book, Mindset. The theory speaks specifically to feedback in terms of how employees receive feedback, and how it makes them feel when they hear the word "feedback."

This theory can be simplified in three key questions that managers can ask employees:

  1. How would you assess yourself this review cycle?
  2. What would you do differently?
  3. What have you learned?

This enables the employee to self-diagnose, as it allows “the employee to do more talking, and the manager to do more listening” Tremayne claims.

And, for those of us being reviewed ourselves, Tremayne’s recommendation is all about receiving the feedback. Reach out to stakeholders, peers, and anyone with whom you’ve worked with over the past year for a thorough assessment of your performance, backed by quantitative data when possible.

In addition to the feedback, make sure you have “your own observations” documented and ready to share with your manager. If you have had those frequent, consistent performance conversations on a quarterly, bi-monthly, or weekly basis “it’ll make for easier conversation towards the end,” Tremayne recommends.

Talent on Tap is a weekly series where Pat Wadors and Brendan Browne break down some of the hottest topics, biggest challenges, and most enticing opportunities in the world of talent. Talent on Tap will also give you an opportunity to hear from other organizational leaders, subject matter experts, and thought leaders in the space. Stay tuned each week for the latest.

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