How Frequent Feedback Improves Annual Reviews

The annual performance appraisal is a staple in many organizations. Human resources is tasked with ensuring managers assess all their team members’ performance and make time to discuss the results with each person. For a week or two every year, much of the focus shifts to the performance feedback process.

However, limiting employee reviews to only once a year has plenty of downsides including:

• A year is too long of a time span – Jamming 12 months of performance management into a single assessment worksheet causes a lot to be overlooked.
• People naturally have recency bias – Managers will likely focus on an employee’s performance over the previous few months, while forgetting their successes and failures from earlier in the year.
• Previous assessments are difficult to remember – Even if reviews are documented, as they should be, it’s a challenge to recall the specifics discussed a year prior.
• Priorities change – Organizational and departmental objectives shift all the time so much of an employee’s review can be obsolete a year later.
• Occasional reviews are stressful – Employees dread going into a review not knowing what to expect and managers don’t enjoy sharing negative feedback with a team member who doesn’t know it’s coming.

This begs the question, why should performance-related assessments be done only once a year? Wouldn’t it boost the company’s productivity and employee engagement if feedback was shared more often – perhaps even on a daily basis?

According to Gallup, highly-engaged business units result in 21 percent greater profitability. And teams that address engagement needs in their everyday work outperform teams that don’t by an average of 20 percent in sales and 10 percent in customer satisfaction. So it seems like a no-brainer that managers should make an effort to share their thoughts with their team members as often as possible.

That’s not to say performance evaluations should be done away with. They should be complemented by real-time feedback delivered in a casual, specific manner (e.g. “Nice job on the client call but here are some tips for next time”) and not just in the rigid setting of an annual review (e.g. “You score 3 out 5 on communication”). Let’s explore a few different ways your organization can boost engagement with effective feedback.

Develop performance goals each employee can continuously work toward

An employee’s engagement suffers when they’re left to wonder about the quality of their work or, even worse, what exactly their priorities are. Some people spend their workdays spinning their wheels because they’ve never been offered any clarity on their objectives.

Every successful business has goals that trickle down to each department. Departmental leaders should then break their goals into role-specific targets for each team member. Goal-setting results in every employee knowing what they’re expected to accomplish and the organization having a game plan for hitting its growth targets that everyone contributes to.

Managers will also know exactly what to expect from each employee and can share specific feedback on the progress being made toward their goals. Accurate feedback is easier to deliver when the company, managers, and each contributing employee are all in alignment with expectations.

Prepare for performance reviews

According to SHRM, plenty of well-known brands like General Electric and Deloitte have replaced traditional annual reviews in favor of regular feedback. This isn’t a surprise since companies thrive when people are focused on the right work and employees feel good when they know how they’re doing.

Managers will have no problem delivering feedback on a consistent basis if they make time to meet with each of their team members weekly or at least monthly. Regular check-ins allow the employee to share what they’re working on and get peace of mind that they’re on the right track. It’s also an opportunity for the manager to ensure their entire team is operating in lockstep and direct reports are working toward performance improvement.

Use annual reviews to build on previous conversations

Annual reviews exist for good reason. It’s important for organizational leaders to conduct and document formal evaluations of every person on staff. It ensures everyone is assessed on the same criteria and HR and company leaders have insight into an individual’s performance.

Using occasional manager and employee check-ins as a primer for annual reviews removes many of the disadvantages we outlined earlier. The conversation can pick up right where the last one left off so both parties know what to expect and have a clear understanding of what’s being discussed.

Additionally, the annual review process is an opportunity to set new goals for employees. It will be easy to recall the ones that were previously set and determine if the employee was successful since their progress has been monitored throughout the year. You’ll know if you need to adjust objectives the employee is still working toward or assign new ones that challenge them to put forth their best effort.