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Always-On Employee Feedback

Are Traditional Performance Reviews (Finally) Dead?

Are-Traditional-Performance-Reviews-Finally-DeadLast year was a momentous one. From Brexit to the election of a celebrity for US president, the world has been in a rollercoaster cycle of big change. It’s about to get even bigger, as we face 2017 not knowing exactly where things stand in terms of world economics, politics, and massive changes in human resource laws. It’s hard not to see the impact that these external events are having on the average workplace.

The Impact of World Events is Being Felt by All

Now that we are a few weeks into the start of the New Year, it may seem like we have taken two steps forward, three steps back. Many companies are reeling from the new overtime laws, a possible repeal of the Affordable Care Act, and new increases in the federal minimum wage law, and the impending exodus of millions of expats around Europe and the Middle East. There is a lot of turmoil, even felt by smaller companies with a limited international footprint.

Performance Reviews May be a Thing of the Past

A big issue that many corporate HR leaders are pondering right now is if it’s worth the effort to conduct employee performance reviews? After all, they are time-sucking, stressful for both HR and employees, and don’t seem to have much value anymore. Is it possible that we are seeing the demise of the traditional performance review? And if so, what is a better option for increasing employee performance and productivity? Let’s take a closer look at what’s happening around the globe and how companies are placing more emphasis on employee engagement metrics vs. performance reviews.

Employee Engagement in the USA and the UK

According to the daily Gallup Poll, as of January 2017 employee engagement is slightly up by 32 percent, as compared to July 2016 when it was just 30.9 percent. With the unemployment rate hovering just under 10 percent in the USA, the outlook is promising. Candidates and employees are still in the ‘driver’s seat’ in terms of their careers, and it’s indicated in how engaged and happy they are. Consumer spending is also up, so for those in the retail and manufacturing sectors, this is good news. One thing is certain -- companies that are proactive about measuring how engaged their employees are can be in a much better position than the competition. Many companies are taking more active steps to increase employee engagement levels as they conduct their annual performance reviews in newer, more positive ways. In a recent HR Dive article, the subject of the demise of the traditional performance review was discussed. SHRM conducted a study that indicates 40 percent of HR leaders don’t see the real value in performance reviews anymore, while 36 percent are very concerned about employee engagement levels.

Does This Signal the End of the Performance Review as We Know It?

Performance reviews are often seen as a small picture of an employee’s productivity rather than an accurate representation of performance overall. On the other side, employee engagement surveys measure daily factors that employees experience. Over time, this is a better way to manage engagement and performance at the same time. Employee engagement is built on values that employees experience in both the culture and what they experience. How well an organization monitors this can dictate how engaged people can be. Performance reviews cannot do this. Why are traditional performance reviews on their death bed?
  • They are not an accurate measurement of an employee’s total year performance (focused on recent events)
  • They try to base performance of all employees into a tiny ratings scale that’s one-size-fits-all
  • They are intimidating and stressful and don’t produce anything positive that the organization can use
  • They don’t account for day to day achievements or success stories from employees who deserve recognition
  • They are usually tied to merit increases and employees are graded on a scale to fit HR budgets

Ditch the Performance Review!

Instead of a performance review, which has so many flaws -- here’s what you can do right now to find out where your people analytics stand. Conduct a pulse survey or a 360 degree survey to ask about some of the important issues that your employees are facing right now. Find out what they are worried about. Learn more about what they need to be happy at work. Make it a priority to measure the engagement levels of your best resource – your people.  Do this now. Get rid of the traditional performance review – they are useless to your organizational goals. Get to know your people on their level and you’ll be in a better position to keep them when things get rough.
To find out how you can benefit from real-time employee engagement surveys, contact Thymometrics by email info@thymometrics.com, call +1 646 760 9323 (US) or +44 (0) 1223 750 251 (Europe) or visit thymometrics.com. Image courtesy of thampapon1 at FreeDigitalPhotos.net