Many businesses and employers simply do an annual review of their employees’ performance at work. But that isn’t always enough for your staff to thrive and for your business to continue being successful.
Have a read of Steve and Emily’s story that will help illustrate our five reasons why annual performance reviews aren’t enough for you, your employees and of course, your business.
It was 9.00 am on Monday 4th March 2019 and Emily was nervous.
She’d graduated 18 months beforehand and landed a job as a Marketing Assistant with Largely Non-Existent Railway Services (LNER). They weren’t her first choice of employer, but marketing was her passion and the role offered a real opportunity to become involved with a wide range of activities that would give her great experience and capitalise on her talents.
Whilst she’d enjoyed much of her first year at LNER, she was nervous because her first annual appraisal was scheduled for 3.30 that afternoon.
Just down the corridor, Emily’s boss, Steve, was not looking forward to his day.
His calendar for 4th March was divided into a series of two hour sessions with each of his four team members, in which he was expected to review their performance over the previous twelve months, set their objectives for the next year, find something motivating to say to each and, finally, tell them what their new salary was going to be. It was one of his least favourite days of the year.
Steve was a bright young manager who understood that people need clear, meaningful and realistic performance goals. After all, if his staff didn’t know what he expected of them, how would they know if they were doing a good job?
But LNER’s business had evolved rapidly in the last year and many of the goals and tasks that he had agreed with his team in 2018 had become irrelevant. So Steve was struggling to see how he could meaningfully assess their performance (let alone objectively justify any uplift in salary) and wondering how on earth he was going to make the sessions productive, relevant and motivational?
Steve ploughed through his first three meetings, trying to strike a balance between praise and constructive criticism and doing his best to review performance against goals he’d set the year before. With some reluctance, he set objectives for the year ahead in the certain knowledge that at least half of them would either become irrelevant or need to be changed.
By the time 3.30 arrived he was thoroughly fed up, but Emily, the top performer in his team, was sitting outside waiting anxiously for her review.
Then he remembered a recent survey by Gallup which showed that employees who benefited from regular reviews with their boss were 300% more engaged and over 20% more productive than their colleagues who did not.
Steve decided to be brave.
He suggested to Emily that rather than attempting a comprehensive review of the previous year, he would highlight a couple of key points and give her general feedback on her performance before concentrating on her achievements in the last quarter. By so doing, he suggested that their discussion would be focused on topics that were current and could address challenges that were real and relevant.
She was happy to agree and there followed a productive, focused discussion that concentrated on matters that were topical and fresh in both their minds. Steve gave Emily some advice on a couple of problems that were troubling her, and the session concluded with them agreeing some clear goals and tasks for the quarter ahead. They set a date to meet again in June and Emily left the meeting feeling motivated and with a clear understanding of what she needed to do over the following three months.
Steve found the session insightful and enjoyable. He also felt that Emily was more likely to achieve the objectives he had agreed with her.
So, what can we learn from Emily and Steve’s story?
The ever more rapid rate of change in the business landscape means that an annual review is simply insufficient to provide meaningful feedback on performance or to set goals that are relevant.
Here are our five reasons why more frequent reviews are important for you, your employees and your business:
- An atmosphere of trust and empowerment is built – and there is overwhelming evidence that happy employees who feel empowered and trusted will work better and stay longer
- Long term plans can be revisited and, if necessary, adjusted more regularly; goals are more meaningful and relevant; performance can be reviewed and tactics adjusted in real time
- Problems are nipped in the bud – and before they cause employees to start looking for another job
- Employees develop more rapidly – to your benefit and theirs
- Your business is more agile and responsive
You say haven’t got time to conduct quarterly reviews with your staff?
Think about it this way. If you have 6 direct reports (and if you have more than 6 then you should consider re-organising) a quarterly review with each will take no more than 12 hours, which equates to less than 2.5% of your notional working time.
Less than 2.5% of your time spent in meaningful, productive, relevant and timely conversation with the key people in your company.
As the business leader, what else have you got to do that is more important?
If you want to continue reading, why not check out our whitepaper on the foundations of a successful business?