MODERN MANAGEMENT
Have annual performance
management systems reached
their use-by date?
By Anneli Blundell
C
hange in business is moving
at warp speed. We are
constantly updating systems,
upgrading service offerings, rolling
out new products and learning new
skills. If we can’t keep up, we get
pushed out. Annual performance
conversations no longer cut it.
Targeted, real-time feedback means
we can change, grow, and develop
the skills needed to stay in the
game.
Performance development
needs a performance
upgrade
‘Managers who provide regular
feedback and opportunities to
improve are far more likely to field
high-performing teams than those
who retain once-a-year rankings.’
—Deloitte
People need constant and targeted
feedback, in real time. That’s how
leaders create high performance.
Imagine the coach of an elite
sporting team giving performance
feedback once a year: ‘Ok Ritchie.
I really like how you improved your
kicking accuracy this season. That
second-quarter goal in the third
game was amazing. If you could
40 ModernBusiness
February 2016
do more of that and pass the ball
more often, our results will improve.
I’ll sign you up for a collaboration
workshop and we’ll see how next
season goes’.
Ridiculous concept, isn’t it? Sport
is fast. It requires skill, teamwork
and individual performance.
What makes us think the game of
business is any different? Leaders
need to pay attention and give
feedback in the moment—not in a
year’s time.
State of play for
performance reviews
Many large companies remain loyal
to annual performance reviews,
much to the frustration of those
involved. For employees, it can be
an administrative formality that
‘ticks the box’ but doesn’t develop
or change actual performance; for
managers, it’s an administrative
burden that interrupts ‘real work’.
Research is beginning to empirically
support what we intuitively know:
annual performance evaluations
don’t positively affect performance.
• Feedback interventions, like
performance reviews, improve
performance 41% of the time and
make matters worse 38% of the
time .
• 58% of executives believe their
current performance management
approach drives neither employee
engagement nor high performance .
• 70% of respondents to a Deloitte
survey stated that they are either
‘currently evaluating’ or have
recently ‘reviewed and updated’
their performance management
systems .
The annual evaluation is a time
consuming, non-value adding,
and possibly destructive process
that does not positively improve
performance at work. The future
of annual performance reviews, as
a management tool, is bleak. So
what’s the alternative?
The performance
conversation trifecta
The simple solution is regular
performance conversations.
Timely, targeted development
conversations that drive
engagement both develop
performance and produce results.
However, simple does not mean
easy. Effective performance