Many of you out there might be surprised to read that I don’t recommend an annual employee performance review. There are still some companies who are holding on to this concept simply because it is a tradition- not because it is necessary. And, other CEOs agree with me.

The main reasons I feel the annual reviews don’t work are because they are too infrequent to make their content meaningful and actionable. If you give an employee items to improve upon, which you always should, you can’t address these tasks until 364 days later! Our digital world processes information in a nano-second, yet we are evaluating employees on a yearly basis? Some employees don’t even make it another year, which really makes the review a waste of time. The entire system doesn’t make much sense.

Furthermore, the process requires that all managers share the same performance assessment standards. However, managers interpret these standards differently, leaving the entire process inconsistent! Lastly, these annual reviews seem too rigid in form and content. Nothing is really meaningful or specific to each employee’s particular performance situation. So, why bother? Well, don’t!

I encourage employers to start using quarterly reviews based upon individual performance. We don’t need numbers 1-10 to rate employees. Managers know where someone has to improve and in what areas a person shines. We have to be more forward-thinking in order to help develop employees and their skill-sets. We want great employees to stick around and have goals, too. If you have an employee who has great numbers when it comes to sales but never finishes paperwork, note it. And, follow-up in a couple of months. Has the employee made an improvement? If not, address it. If so, reward it! The system should be simple, follow the law and provide real feedback.

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