It’s time to get rid of the annual performance review.

Why would a Human Resources professional say such a thing? Aren’t performance reviews necessary for providing feedback, putting together development plans or determining salary increases? Not necessarily.

And, how many times have managers sat down once a year, with a huge sigh, only to see the process as another task that has to be checked off of an already long list of things to do. As a result, the intentions of the performance review are often not realized.

There are a few reasons why I suggest that abolishing the annual performance review is a worthwhile thing to do.

1)      For performance feedback to have more impact, it needs to be provided at the time the observations of performance are being made. When managers rely on the annual performance review, the feedback has lost it relevance.

2)      Performance appraisals often include ratings and the rating can be a distraction to the real discussion about whether or not quality work is getting done. The risk is that more energy is spent discussing, debating or defending a rating when the conversation instead should focus on objectives, progress and personal growth

3)      The overall contribution of the performance appraisal process to organizations is questionable. Numerous studies indicate that performance appraisals don’t work. For example, in their book “Abolishing Performance Appraisals”, Tom Coens and Mary Jenkins cite a Society for Human Resources Management study stating that 90% of performance appraisal systems are not successful.

So what are the options? I think there are several and I have listed my top three below:

1)      Keep the intention of the performance appraisal, which is to provide employees with meaningful feedback, and create opportunities to provide this as it is observed on the job and through regularly scheduled meetings with your employees.

2)      Invest in your manager’s capability to coach the members of their team. Through effective coaching, managers will have the skills to provide timely and specific feedback, regularly, all year long. This will have a greater impact on employee performance and demonstrate to employees that their manager is there to support them in reaching their objectives.

3)      Support feedback through other integrated people practices. Examples of this would the creation development plans or conducting monthly update meetings with each team members.

Companies that continue to use formal, annual performance appraisal systems may be well served to step back and take an honest assessment at what results their appraisal process is delivering to their organization. If it’s moving the business forward, keep it and improve upon it. But, if it’s taking up more time and effort than it’s worth, put it aside and replace it with alternatives that will be friendlier to your managers and truly enable performance of their teams. While such an action may be considered bold, you may find that it is met with cheers all around!