Why Companies Are Ditching the Annual Employee Review

Why Companies Are Ditching the Annual Employee ReviewEarlier this year, Accenture became the latest in a string of companies to banish the annual employee review — and we say bravo! While looking back over a year’s worth of progress and achievements is useful for setting future goals, the way most companies have been using annual reviews hasn’t been helpful.

The same goes for annual employee surveys; there’s little use in asking people how they feel about the organization if it takes a whole year before you ask them again. Anything can happen in that amount of time that can mess with the data you’ve collected.

There’s a better way: smaller, more frequent surveys and smaller, more frequent feedback. And as more companies focus on alignment, HR can step up and use its strengths — talent recruiting and employee communication — to implement these new performance management tactics. Throwing out the annual review isn’t an innovation only large companies can undertake — in fact, smaller companies are better suited to make these quick changes and to try something new. Here’s why.

The Nature of Work Has Changed

Organizations are increasingly managing and assessing work in new ways, and so performance management has had to change as well. Today’s workplace moves too quickly for 12-month goals to be useful. Instead, with more project-oriented workflows, three-month and even two- to four-week assessment cycles are more common. Companies are expected to react to the market more quickly than ever; more frequent reviews of employees’ work can help fine-tune that work more efficiently.

It’s About More than Work

Performance management has also moved beyond simply observing and grading someone’s work. It now involves a more active facilitation of that work: Managers need to know whether employees have the tools and information they need to complete their work quickly and efficiently, and to help out if they need something. With more frequent and less-invasive check-ins, such as a quick two-question survey instead of an hour-long questionnaire, managers can keep an eye on projects without disrupting workflow.

Tech Makes It Easy

Long paper surveys that took weeks to generate results are a thing of the past. With the technology that’s now available, managers can get real-time results about how people feel about their employers, their work, their current project, or anything else an organization wants to measure. Analytics can get a deeper dive into trends, making it possible for leaders to make changes that can bring employees into better alignment.

Thought it all, HR must remember that any change in performance management requires training and equipping managers to own and facilitate this process. Organizations must be clear about employee expectations and be able to articulate the value proposition it offers. Dropping the annual review represents a big shift in the relationship between the organization and employee, and one that can yield better alignment and engagement when done correctly.




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Talmetrix is an employee feedback and insights solution that helps organizations better attract and retain talent to achieve business goals. Our solution makes it easy for organizations to capture employee feedback (feelings) and organizational data (facts) to discover actionable insights. With a unique combination of software, content, data, and advisory support we can help you measure and improve your employee experience. Contact us today to learn how your company can start achieving better business results.

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