The old way of doing annual performance reviews is dead. More and more companies are changing their focus from annualized performance review processes to more involved and collaborative ongoing feedback plans that put the employee’s development at the center of attention. Here are some of the things to see changing in talent management in 2017, and what some companies are doing now to respond to the problems at hand.

Feedback in the Past Was Anything But Timely

Annual performance reviews include a lot of information about how the employee is doing at work. However, this feedback was not timely at all. Consider yourself doing a project in January and February and then not hearing about how you did until your annual review in October. These time lags do not help the employee develop and change their behavior over time. Companies are now changing their review processes to allow managers and supervisors to provide both formal and informal feedback to their employees on a timelier basis. This could be at the end of the project, and the end of the month, or even throughout a project on a weekly basis. This will allow employees to change and develop more quickly within the company.


Ratings Create Lower Morale

We hate to be rated against other people, especially when our ratings prove to be lower than that of our peers. We are also not satisfied with being called “average” in our field, and we take it as a personal attack. Companies have been catching on to this in the past couple of years and have been changing their ranking systems to battle these feelings. In an article in the Washington Post it is stated that companies like Deloitte and Accenture are doing away with these ranking systems altogether. “We’re going to evaluate [employees] in [their] role, not vis a vis someone else who might work in Washington, who might work in Bangalore. It’s irrelevant. It should be about [them].” The aim of these new initiatives is to ensure employees are feeling respected in their roles and are not being aimlessly ranked against their counterparts that may not have the same level of job experience, duties, or even the same role.


Self-Promotion Is Not Really What Makes Someone a Good Employee

What has also come to light in companies that are revamping their performance review process is that the people who are moving up are those that seem to be the most narcissistic and self-promoting. These are the people who will let everyone know of their accomplishments and who lack a certain sense of humility. Because they are the “squeaky wheels,” they are “getting the grease” and are being rated higher because they are perceived by upper management to be doing more. This is often not the case, and many have made the argument that these are not the people that you want in the upper echelons of your company. The new performance systems evaluate everyone individually in their own role and focus more on professional development than arbitrary rankings.


Current Processes Cost Too Much

According to the Washington Post, it is estimated that the cost on an annual basis for upholding the current performance review processes is roughly about $35 million for every 10,000 people employed. These costs are mainly attributed to the nearly 200 hours per year on average that each manager spends in trainings on performance reviews and the process of actually performing these reviews each year. On top of that, the ROI of employee recognition programs is hard to prove. Considering the high cost of these processes, many companies have been disappointed with the returns they have been seeing and want to put that money towards development of these individuals rather than just telling them how they are doing.


Annual performance reviews are on their way out of the forefront of business. These review processes used to be respected and encouraged in the working world. Today’s worker is now requiring something different from their employers. Luckily, employers are reacting quickly and changing the way that they are doing things. Talent managers and HR departments that have not changed the way they are doing things yet should make these considerations going into the new fiscal year. These new changes will foster the professional development and boost the morale of the modern day worker in 2017, and those companies still on the old annual performance review programs will fall behind.

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