Annual Performance Reviews Are Dumb

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I finally did it! You’re going to be so HR-jealous!

I have ditched the annual performance review!

A third of you of you just fell over dead. A third of you think I am a complete idiot. A sixth of you will stop reading now. And the other sixth of you already ditched your performance reviews.

Here’s the thing, folks… No one likes them!

The employees get all stressed out. The managers hate sitting down and doing this, and HR hates tracking them and fixing haloed reviews.

The only people who like the annual performance reviews are the sadistic HR people who want to have the “Gotcha!” moments (and the annoying teacher’s pet employees).

You shouldn’t be talking about performance once a year. You should be talking about performance all year long. Monthly. Weekly. Daily.

And I know your attorney is going to tell you not to do this. He’ll tell you that you need this annual review to save your butt in court. You need to prove why you laid off the people you laid off. You need to have this annual review to prove why you paid Jimmy more than Sarah.

But he’s wrong. And who is running your HR department? You? Or the attorney?

You don’t need that crappy piece of paper to prove any of that. You just need documentation. Get your documentation from other places.

Set Goals

Teach your managers to set goals for their employees. Set monthly goals. Set weekly goals. Have your employees sign off on their goals. When they don’t meet their goals, you have documentation.

Write Them Up

And when people don’t perform? Write. Them. Up. This includes attitudinal issues. You can write people because they’re short with their co-workers or because they’re mouthy. I mean, you’re going to check a box about their demeanor once a year on that stupid performance review anyway, so say it AS IT HAPPENS.

And then move on. Don’t harp these issues again later in the year. Let the employee learn from the write-up, or dump that employee for not learning. If you don’t like someone, dump them, find someone new. You’re well documented to do so.

Ditch Annual Performance Review Raises. 

Oh. And if you’re giving annual cost of living or performance raises at the time of the performance review, you aren’t doing it right anyway. You’ve conditioned your employees. Pavlov’s dog doesn’t care what’s happening when the bell rings. He knows he’s getting fed, regardless.

pavlovs dog

Stop feeding people who don’t deserve it. You’ll be a huge hero.

And I promise you, performance will improve when word gets out. Do you really care if the non-performer gets mad about this and quits? Heck no! Let him walk! Give him a brown box and help him pack!

Tie all of your pay to performance. Give managers a budget to work within (the same budget you used to dish out annual raises), and tell them they need to run pay changes by you for approval first (to be sure they aren’t blowing their budget too soon). Allow your managers to pay for performance as excellent performance happens. Recondition your employees. Recondition your managers.

Great Work = More Pay

Crappy Work = Nothing

Annual Performance Review = Dead

What do you think? Are you brave enough to ditch your annual performance reviews?

FOT Background Check

Meredith Soleau
Meredith Soleau was supposed to be a famous country singer, but her parents made her go to college and major in something “real.” She graduated with a B.S. in Business from the University of Toledo, and landed a gig as a Human Resources Director at a large car dealership in Ohio. After eight years of HR at a car dealership, she burned out, decided to sell cars herself, and has since launched her agency, where she specializes in finding blue-collar workers. Clearly she has plenty of stories. But the best stories are probably about Meredith, herself. Read them on her personal blog, meredithsoleau.com, where she holds nothing back. Follow Meredith on Twitter. Become her friend on Facebook. Connect with her on LinkedIn.

5 Comments

  1. Amanda N says:

    I love this, and I am so jealous. I haven’t been able to find a HR leader with the guts to stop the madness of annual performance reviews. I think too many HR people rely on them because they’re quantifiable…how many we’re completed, how close you hit the performance distribution, the size of the increase for top performers vs bottom performers. All this does is undermine what employees really need: clear expectations, guidance, coaching when they misstep, appreciation for their contributions, and meaningful rewards when they succeed.

    Reply
  2. I love this! You are spot on.
    Reward performance. Everyone should be doing this. Unfortunately some managers still need to learn how to document and set performance goals.
    Excellent post!

    Reply
  3. Performance should be rewarded at every step and not at the end of the year and same should be for the mistakes. HR Managers should concentrate more on employee productivity by setting timely goals in communication with the management.

    Reply
  4. Best…post….ever…..

    Reply
  5. Tatiana Beale says:

    I couldn’t agree with you more! There is nothing that impacts performance better than real-time, frequent feedback.

    Reply

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