Annual Review Thoughts

Oh, it’s that time of year again: the time to spend thousands of hours and millions of company dollars pretending to fairly and impartially rate and rank our peers.

Oops, did I just say that out loud? 

I did. I’ve said it before and I will say it again:  I think the annual review cycle is an outdated, unfair, and demotivating waste of time.  It satisfies an organizational need to put on paper that some process, however worthless, is being followed. It’s a matter of doing something by the letter of the law, not the spirit.

Nor am I alone in this assessment.  Aubrey Daniels, in her book, “Oops! 13 Management Practices that Waste Time and Money” talks about the annual review cycle as one of the biggest wastes of time and money in an enterprise.  Here’s what I have always claimed:

Reviews are often a way to back-justify a popularity contest

Confirmation Bias is crazy evident in this.  I need to give an employee an average review.  Can I think of a few times they came up short or screwed up or maybe just didn’t step up to handle a dropped ball?  Sure.  I need to give an employee a stellar review to justify a promotion or a raise for some non-merit-related reason, so can I find some examples?  No problem!

Annual is not often enough to be relevant feedback. 

For those of you who are parents, and responsible for the social and intellectual development of your children, imagine if you gave feedback to your kids once a year (well, that’s kinda what Christmas is, and may provide about the same behavioral modification impact).  You wouldn’t do that.  You know that feedback long after an action is useless either as a punishment or a reinforcement.  So why do so many people wait to do it until they’re forced? 

Many folks who went to college/university took some kind of intro psychology class.  In terms of behavior modification, the ultimate point of doing some kind of review process, positive feedback needs to immediately follow the desired behavior to effectively encourage change. 

Good managers knows that they’re always trying to best motivate their employees, maximize productivity, and leverage skill sets.  Why would you have them wait a year to give official feedback?  If they’re not giving lots of great, positive, frequent feedback, then maybe they shouldn’t be managing people at all.

Forced curves are demotivating

You hire the best, why would you tell all employees that they’re the best you could find and then tell 90% of them they’re average?  Because you can only give one person in the department an “Exceeds Expectations” instead of the dreaded “Meets Expectations".  Chester has been here eight years and needs to make senior developer or he’s leaving with all our legacy knowledge.  Guess everyone else is getting a “Meets”.

You’re not graded against your goals

There’s a whole aspect of the annual review that doesn’t really mean much: it’s that setting of goals and then evaluating your performance.  Except in sales departments and similar organization, the work is often not sufficiently metrics-driven to give anything more than a subjective nod to meeting of goals.  The goals may not be concrete enough, or they may not actually be related to the day to day work and are therefore stretch goals.  The idea that goals can get adjusted mid year to reflect actual work done as job changes is a symptom that the feedback cycle is too long.

So that’s the dark side of reviews as I see them, but what would we do to replace them?

What can we do instead of annual reviews?

Do nothing

If reviews are so costly, a good alternative would be doing nothing at all.  First do no harm, is a great motto.  Address the roots of the problems you face.  Annual reviews are often a symptom, not the disease itself, and they are the cure for nothing material.

More informal feedback

There’s this weird vibe at the office where we can’t tell each other what a great job we’re doing, or what a cruddy decision something was.  Maybe that’s because if you give someone positive feedback all year, they’ll be upset if you give them a Meets rating at the end of the year.  Or maybe egos for 30-40 year-old office workers are more frail than that of your average tween.  Start by praising your coworkers and people you supervise.  Get used to giving honest face-to-face feedback about problems and screw-ups.  It’s tough and uncomfortable to change, but it would make the office a better place.

More frequent feedback

More frequent feedback would be helpful.  Annual reviews suffer that downside of not being timely and therefore useless.  Give feedback early and often.  If you’re a manager, find a way to give feedback with every interaction.  Yes, every interaction.  And keep feedback focused on improvement, not criticism.  Focus on what was done right.  Most people get defensive when criticized, because they already know what they did wrong.  Criticism amplifies that conscience effect and kills morale.  Positive feedback is almost always unexpected (partially due to imposter syndrome), and works to reinforce more of whatever you said you liked.

Quarterly bonuses and raises

I once worked for a company that gave its employees quarterly bonuses.  It was the greatest thing ever for motivation.  If you had a great quarter, it was awesome.  If you had a bad quarter, and your bonus kinda sucked, you could turn it around in a quarter. With an annual review, if you have a bad Q4, and the political whimsy is not on your side, your entire annual bonus/raise could be jeopardized.  Quarterly bonuses also keep an employee engaged and motivated to self-reflect. 

Lighten up on the tooling

The tooling and formality around annual feedback is stifling.  First, put in your goals for next year.  Have a meeting to review the written goals.  Sign off on the goals.  At the midyear review, tweak the goals because practically, you should never have set those goals in the first place, or maybe your role has changed, or maybe your manager has.  Then do five to ten 360 degree reviews.  Then write up your own self assessment.  Then meet formally with a manager and document that.  Then approve the final copy, regardless of whether you agree with it.  It all smacks of busy work, and I don’t know that anyone finds any value or pleasure in doing it.  Do whatever it takes to take the time-wasting tooling out of the equation.

Ultimately…

It’s time to do away with this ugly tradition and replace it with more rewarding behaviors in the organization.  At worst, you’re taking away an expensive (both in time, goodwill, and motivation) waste of time, and at best you’ll be improving your culture, focusing on productivity, and raising the spirits of your most important resource, your knowledgeable internal associates.