Many of my clients are at the start of their company’s annual performance review process. While managers and employees understand the importance, the process still strikes fear and loathing in their hearts. Many managers dread doing performance reviews, believing that they’re time-consuming, administrative exercises in futility forced on them by Human Resources (HR). A high percentage of employees think appraisals are stress-inducing and pointless at best; at worst, the reviews are tools that make them feel unimportant and unappreciated, which causes them to feeling demotivated and leads to a lack of employee engagement. While employees are grateful to be getting feedback, it isn’t productive or effective if this is the only time they get it.

We’ve seen a trend away from annual performance reviews in the past few years. In her article back in October 2012, “Is it time to give up on performance appraisals?”, Gabriella Jozwiak stated that a US poll of 2,677 people (one-quarter of whom were HR professionals) by rewards-and-recognition consulting firm Achievers “revealed 90% of staff find annual performance reviews unnecessary.”

Research indicates several common shortcomings to annual performance reviews because they:

1. Take up a lot of time. Traditional performance reviews can take hundreds of hours for managers, depending on the number of direct reports, and 40 or more for each employee, as well.
2. Reflect the most recent time period. Everyone has days or even weeks when they’re not on their “A” game. Annual performance reviews don’t always give an accurate picture of an employee’s consistent overall contributions. For one thing, they often rely on a busy manager’s memory, which naturally defaults to the most recent period. Suppose an employee had a family problem in the last few months before the review. Does that negate the outstanding work they did for the nine months prior to the problem?
3. Happen too late to adjust performance or behavioral issues. If one of the goals of an annual performance review is to motivate employees to improve performance, it’s of little use to wait for the review date to address an issue. Giving an employee feedback at the time it could make a positive difference makes more sense.

But many companies still require the annual performance review. So what can you do to make the reviews more relevant and meaningful?

1. Coach, don’t review. During the annual performance review, book monthly or quarterly one-on-one sessions during which you and your employees set goals, monitor performance, and discuss what successful outcomes look like. Traditional reviews can leave employees feeling judged, like their manager is storing up mistakes to bring up as “Gotchas!” Coaching encourages strong performance and supports team members during weak performance. It makes employees feel like their manager is on their side and they’re working together for a common goal.
2. Use notes from each meeting to complete the annual performance review. Keeping a few short notes from monthly meetings will give a more balanced view of an employee’s overall contributions, not just focus on the last couple of months or the “peaks and valleys” of their performance.
3. Give praise and credit where it is due. When many perks and benefits have been reduced as a cost-saving measure, reviews are more important than ever to make sure high-performing employees feel recognized and appreciated. If you miss an opportunity to praise an exceptional employee, you may lose them to the competition.
4. Address any issues. The best time to deal with inappropriate behavior or lack of performance is when it happens. Frequent meetings lend themselves to addressing the issues and following up to make sure they are being corrected before they escalate into bigger problems.
5. Close on a positive note. Make sure that you and your employee are on the same page about performance, goals and objectives, and their development plan. Employees should leave the meeting feeling that you believe in them and will help them achieve success.

Feedback and coaching on an ongoing basis can help managers take small strides toward improving performance while relieving some of the stress of the anxiety-provoking annual review. What tips do you have the make the annual performance review easier? I would love to hear your ideas.