Is the employee annual review outdated?
24th January 2024

While it feels sad that the holidays are well behind us, there is one aspect that I am always a little bit happy to say goodbye to: the obligatory meetups. The holiday gatherings with people you only see once a year. Parties with distant relatives, work dinners as a tagalong partner or drinks with suppliers that want to show you how important you are to them. These gatherings are often awkward with the same two questions: “How has your year gone?” and “What are your holiday plans?” While I don’t mind the small talk, as I get older, I seem to have less tolerance for it and become bored with having to repeat myself.
I can’t help but think that the annual employee reviews bear somewhat of a resemblance to this situation. Perhaps I am a little dramatic in my thinking and I would hope that most employees have a sit-down conversation with their boss more than once a year. But I am enough of a realist to know that many organisations do not value regular sit downs and instead the annual review becomes an obligatory trail of paperwork that both the employer and the employee dread.
The good news is that in the HR world, the annual performance review is becoming a thing of the past. More and more organisations are ditching this long-hated system and instead are moving to a model that is regularly reviewing the performance and development of the individual.
It is important to note that annual wage reviews are still happening, however the important conversations involving feedback, relationship building and creating a plan of development for the employee are happening in more frequent bursts with measurable goals that are constantly being reviewed and tweaked over the year.
These conversations are not meant to be cumbersome but instead are all about helping the Employee succeed. Performance and Development conversations not only help to build a plan of success for an employee, but they also address issues that the individual may be facing, brainstorm solutions on overcoming these issues and allow for important vulnerability and relationship building between the Employer and Employee. If done well, these regular catch ups can help to build trust and understanding, provide role clarity and clear up misunderstandings. Most importantly, these conversations mean that there should be no surprises when an annual wage review is conducted.
Key Guidelines for setting up a performance and development process
· Consult with your employees to discuss the purpose of the regular catch up. Its important that the intent of this process is positive and it’s about helping your employees develop.
· Agree on measures that everyone will be provided feedback on. These might be things like behaviours that align to your values, health and safety practices and/or specific KPIs related to an individual’s role.
· Agree on the cadence of the conversations. At a minimum I believe that these should happen once every three months. So that it is a priority, add it to your calendars.
· Create an easy to complete form that provides an opportunity for the employee to fill in ahead of time and the employer to put comments in following the conversation. Remember the purpose of the conversation is not to be another administration task – it’s about the conversation! For some employees however, the feedback in writing is valuable to them and having specific agreed actions in writing helps to clear up any ambiguity or misunderstanding. Furthermore, for employees that may require a disciplinary process, these reviews can be a helpful record of clear and specific feedback.
As most New Zealand organisations head into the final quarter of the year, now is the time to start planning for the new financial year. Why not think about doing things a little bit different that focuses on better engaging your employees. Having a regular session of feedback that helps to develop trust and communication is a great place to start.