Why Year-End Reviews Are A Big Fat Waste Of Time

The standard-model performance review is an unhelpful barrage of built-up criticism. Instead, give feedback consistently so that your employees hear the good with the bad and make improvement a matter of routine.

Let's cut to the chase: If the only feedback your employees get from you is in the form of a 6- or 12-month performance review, it’s time to change your approach to feedback. Dropping bombs on employees once or twice a year only serves to build up pressure and make feedback sessions feel like indictments. And most importantly, it does little to alter behavior and improve performance and productivity, which should be your goal.

For feedback to be effective, it can’t be a special occasion, says Bruce Tulgan, author of It's Okay to Be the Boss: The Step-by-Step Guide to Becoming the Manager Your Employees Need. “My view is that feedback is much too often given when things are going wrong. I call that ‘bad-news management’ because every time they hear from you, it means something’s gone wrong. You should always give feedback when things are going wrong, but you should also give feedback when things are going right, when things are going average.”

So instead of waiting for the obligatory performance reviews to come around, you should have a built-in feedback loop with your reports. “The best approach is to be giving people feedback on an ongoing basis about how their performance is lining up with expectations, and giving them guidance, support, and helping them make adjustments,” says Tulgan.

With this kind of ongoing dialogue, and by encouraging transparency and candid truth-telling company-wide, everyone stands to benefit through improved performance and enhanced working relationships.

Up Your Frequency
There are a litany of reasons managers give for why they don’t provide feedback more frequently, says Tulgan. They don’t have the time. They think that empowering people means letting them figure everything out for themselves, including what they’re doing right and wrong. Some feel they aren’t any good at coaching, while others are conflict avoidant or afraid of spoiling the collegial work culture. “All of these things contribute to managers being either unwilling or unable to engage in sufficiently detailed and consistent dialogue with their people,” says Tulgan.

The problem is that when conversations providing feedback happen infrequently, they have a tendency to cause more harm than good. Tulgan makes an analogy to working out: If you go out and try to do a five-mile run without working out regularly, that’s when injuries occur. “Part of why the ongoing dialogue works so well is it lowers the stakes in each of the conversations. Think about what happens in the 6- and 12-month reviews. You’re talking to people about stuff they did 6 or 12 months ago, for one thing. And they’re like, ‘Wow, I wish you would have told me that at the time.’”

Not that performance reviews should be tossed out altogether. But instead of bringing new feedback to the table, they should summarize the ongoing dialogue and how the employee can take his performance to the next level. Big picture stuff. Meanwhile, the ongoing discussions should provide clear goals, concrete expectations, a timeline, and requirements within which to meet agreed upon goals.

Get Your Motives & Your Facts Straight
Much of the work that goes into providing effective feedback should actually take place well before you sit down with an employee. Having clear intentions for the conversation will help set an appropriate tone, says Joseph Grenny, co-author of Crucial Conversations: Tools for Talking When Stakes Are High. If you come from a place of anger or revenge, it will hamper progress. “We know that coming at people with that kind of motivation is going to shut them down,” says Grenny. “They’re going to get defensive, they’re not going to be interested.”

Before offering feedback, Grenny suggests asking yourself three questions: What do I want for me? What do I want for the other person? What do I want for the relationship? “The people that are really good at creating a non-defensive, open conversation with people tend to talk to people from a perspective of, ‘I care about you and I want you to be able to achieve the results that are important to you, and I want to be able to get my results.’ When you are coming from that place, people sense it and it colors the entire conversation.”

The other homework you need to do before a feedback session is gather facts so you can provide substantive evidence of the points you want to make. “You need to write down what conclusions you want to share with this person about their performance and what supporting facts you have to dredge up to help illustrate the points you’re trying to make,” says Grenny. “You have to do that work. If you don’t, what you’re going to be having is an abusive conversation where you insult somebody without informing them.”

Stay On Track
It’s important to make sure the feedback sessions stay on track, both in terms of the topic at hand, as well as the emotional balance. “You need to be clear on the points you’re trying to make and if people are moving off topic, you’ve got to be good at bringing it back to the central point,” says Grenny.

The emotional aspect of a conversation can be a bit more difficult to negotiate. “Oftentimes, if someone is getting loud or argumentative or defensive we think “Oh boy, they can’t handle this,” so we start being apologetic and watering down our message, and sugar coating it.”

This is the wrong approach. The way to handle defensiveness is not to minimize your message, but to make the person feel safe, says Grenny. So when you sense someone starting to bristle, set aside the feedback for a moment, and show them that you have their best interest at heart. “The first thing you have to say is, ‘Look, I want you to know that I want you to win here. I’m not giving you this feedback because I’m trying to tear you down. In fact, I need to talk with you about this because I think you got potential here and I want to make sure you achieve your potential.’”

Create a Candid Culture
Many organizations suffer from a dearth of candor, says Grenny. He suggests creating a culture where most performance issues aren’t handled by you as the boss, but by the person’s peers. “Let’s be honest, in today’s world we don’t interact with our bosses the way we used to when they were standing there with a clipboard on the factory floor observing us.”

Grenny says it’s key to empower peers to provide each other with feedback and teach them the skills to do so effectively so performance problems are handled on the spot and between the people with which they occur. “You need to be actively teaching skills they ought to use for delivering feedback and sharing things because people don’t come into your organization with these types of soft skills. If leaders aren’t fostering the kinds of competencies needed to a create a positive cultural operating system, then what you’re getting is the path of least resistance, and that’s obfuscating, that’s politicking, it’s gunnysacking, it’s withholding, it’s all of that negative stuff that creates cancer.”

Feedback as Transparency
To that point, encouraging feedback has its operational benefits, but it also contributes to an overall healthy, open culture. Rand Fishkin, founder of SEO software firm SEOmoz, has a notorious proclivity for transparency. He’s blogged about the company’s ups and downs: the trials and tribulations of venture funding, his own performance, and an insider’s view of mistakes the company has made. “It’s expected when you say that your company believes in transparency, that what you really mean is ‘We will write about things we do well and we’ll share when we’ve been successful.’ And it’s actually far more interesting and far more challenging, but also much more authentic when you write about failure.”

Transparency and authenticity have already been written into SEOmoz’s core values—which Fishkin takes very seriously—but his outward transparency has also been a good model for internal culture, says Fishkin. “That’s definitely something that over the years, I’ve become conscious of. And it’s very refreshing. I think it takes a little while for someone who’s new to the company to get into that mode of thinking.”

Fishkin continues, “In much of the corporate world, what I hear is that a lot of people have this fear around sharing their insecurities or sharing things that have gone badly. At SEOmoz, we’re working very hard to make it the opposite.”

Find more management tips in the Fast Company newsletter.

[Image: Flickr user Eric]

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21 Comments

  • Dan McNair

    Great points all around. Well said, Anne & Marcia...especially with regard to the damage done by rating and ranking systems. So much time and energy goes into it, but for what gain? Typically does more harm than good. It's hard to believe such a destructive process continues to live on. Maybe 2013 will be a big year for HR with a paradigm shift toward coaching and building teams around strengths rather than trying to "fix" weaknesses with a tired, old evaluation approach. Happy New Year, folks!

  • Lisa Roepke

    Great article that reinforces the tools to effect positive change and reinforce good behaviours.

  • Will Saunders

    I agree with this. I have to remind some of my employees to submit their time and attendance records every pay period. That's the ONE thing they do that benefits THEM (if they don't do it, they  won’t get paid) and they can't even remember to do it. So, all the other reviews and counseling sessions, meant to help them do their jobs (and benefit the organization) are worthless just as this article suggests. If they can't routinely do things for their own benefit, how can I expect them to routinely do anything to benefit the organization?

  • Linda Galindo

    It is heartbreaking to hear a manager say with absolute dread in their voice "I have to get my performance evaluations done" and then tell me they have 20+ in the pipeline. Human Resources needs to check the box and the loser is the employee. To that end, I always tell employees to self-empower and adopt a mindset of total ownership for their performance evaluation. "This is what I did, here is what I learned and here is how I have increased my accountability for results." Using three worksheets tethered to their job description, goals and Definition of Success or goals, they can keep track in a relevant, real example, results-focused way with specific opportunity for feedback that will improve their performance on-going. Their "Me" folder is organized, useful and ready for performance evaluation and input any time, all the time. It's not a selfish "me", it is a responsible "I". What's the downside? The employee soon realizes they have outgrown the foolishness of once a year, time wasting performance evaluation and start looking for an organization that will value their demonstrated growth and development. Keep up senior management, or you are going to lose out, big time. Thank you for a fantastic article Mr. Wilson!

  • Vivi

    Timely feedback is key, couldn't agree with you more! Fishkin's approach 2 thumbs up!

  • Stress Judo Coaching

    I agree with this article so much, that I do not know anyone's extension in my office (except my assistant, because she can handle any problem that comes up).  If I need to talk with someone, I actually walk to their office.
    The "review" is mostly upper management flying in and listening to me say "we've talked about how well you've been doing this" for each item on their checklist.
    P.S. Upper management consistently tells me that my reviews have to be more critical - find things for them to improve on.  When I explain that we talk about those things on a weekly basis - well, it seems to confuse them.

  • N. K. Joish

    Only six monthly or annual reviews are too less and are likely create more problems. quarterly reviews in a formal way are must and they must be documented. monthly informal reviews should be encouraged and if possible may also be documented. further it is necessary to train the people how to conduct review. if the process of review is not correct, it may not give the desired result.

  • Waggler

    Senior management is meant to ensure their organization works as a system that helps employees to efficiently determine and meet requirements.  This includes the recruiting and training processes that ensure employees have the jobs they love to do (abilities, skills and knowledge - aka competence).  

    Ranking and yanking or replacing employees who are in jobs they cannot do well is therefore a failure of leadership. Better for leaders to focus on their management system so it understands and plays to their employees' strengths and does not fail the competent employees who are serving customers well.

  • Anne Miner

    In my experience, people perform best when they are doing what they love to do, and they love who they do it for - both their direct "supervisor" and their customer or client. Find a way to build on people's strengths, support them in getting better and better at what they love to do. Coaching for correction and improvement is best given immediately - don't save it up. And forget about "fixing" people or eliminating their weaknesses. Just show them how to function effectively in a group and let them get on with doing what they do best.

  • Dan McNair

    Marcia is right -- we do need to get rid of performance reviews; and Gary is right, too -- doing so leaves a void. HR Executive magazine recently told the story of how Hilton replaced the traditional performance review with a coaching approach that includes many of the same underlying philosophies noted above in this article. The system must be simple and feedback should be candid, ongoing (more frequent) and aligned to future goals of both the individual and the organization.

    I also like what Mary says about de-bundling HR systems from an overall rating. To use Dr. Covey's analogy of the goose and golden eggs, too often we try to use one process for measuring production (eggs) and increasing production capability (goose development). We need to separate them, and to Gary's point, Catalytic Coaching is the best system I've seen for employee and career development (growing the geese). It's separate from counting eggs but the end result is a lot more eggs along with happier, healthier (more productive) "geese."

  • Christine Mcgregor-Pennock

    in reply to Gary , I should have made it clearer that ongoing performance management does not replace the traditional year-end assessment but leads up to it. having been performed well it paves the way for a stress-free meeting that can concentrate on : " what else should we be doing to develop you " ? 

  • Gary Markle

    Ongoing performance feedback is helpful and instructive.  It doesn't fully fill the void left by abolishing of appraisals, however. 

    Consider replacing evaluations with Catalytic Coaching.  It's a performance management system that works.  No labels.  No grades.  3 simple forms used in four kinds of meetings that takes five hours per person per year. 

    The process leads to a much more engaging conversation that is focused on career development while producing rapid and meaningful behavioral change.  It's also much safer from a legal perspective.  It's been implemented by hundreds of companies and field tested for twenty years. 

  • Christine

    I could not agree more : we created a workshop called " Visibility " ( or the "how-to" of Execution ) wherein we train the procedures of ongoing performance management. Sadly there are too few managers who actually manage and their abdication is evident in these annual reviews. There is actually no excuse for employees to fall short or "almost meet " expectations. Every single day of the year everybody , without exception , should know exactly where they stand and the status of their value and contribution to their department and the company . By the end of the year there should be no surprises : ongoing management and supportive coaching will  encourage those who are doing well to do even better , those who are slacking will have received support in getting back on track ( because the reasons for slacking would have been investigated and a mutual decision would be made to rectify matters ) and those who continue to slack and under-perform will either be placed in another more suitable department OR there will be enough filed evidence to show them the door.
    Sorry people, once a year just does not cut it !!!!
    The other upside to this is that people feel valued, are happier in their jobs are more engaged and perform and produce better. 

  • Martin Haworth

    If the year-end outcome is a surprise, your boss isn't doing their job.

  • Raymond Hofmann

    Ongoing feedback is an important part of the solution. Yet I suspect there's a larger issue here: performance needs to relate to objectives, and it's the objective setting process which is so totally broken in many organizations. It is bureaucratic and produces laundry lists of fuzzy objectives at best. Yet having clear, meaningful objectives against which to evaluate performance goes a long to way to foster not just continuous feedback but a generally constructive performance discussion. So agree on clear, meaningful objectives and the performance discussion becomes a constructive dialogue, rather than a manager "dropping bombs of subjectivity" on his direct reports. My recent blog post "a better way to set objectives" is dedicated to this issue. You can find it here: http://hofmann-management.ch/i...

  • Mary

    A distinction needs to be made between the performance appraisal discussion and a performance rating. When I wrote the book "Abolishing Performance Appraisals" (referred to by Marcia) my intent was to make a case for eliminating performance ratings and de-bundling the personnel systems driven by the rating (feedback and development, compensation, addressing problem performers, selection, etc.)  These systems are critical, but tying them all together through a rating renders the whole system severely compromised and ineffective.  Ideally, each of these key HR processes would be designed in their own right grounded in social science research and the values and assumptions that each organization holds dear.  After debating this issue with the same failed problems since the third century it's time to stop treating the symptoms, understand the core issues, and design a sustainable solution.   

  • Joe Leavitt

    Here @DaveRamsey we use it as a time of affirming the positive and setting goals. Time for communicating the negatives is ongoing.