Are Annual Reviews The Enemy Of Employee Engagement?

By Andy Campbell

Accenture recently added its name to the list of companies doing away with employee annual reviews. It is a trend that’s gathering pace and it’s easy to see why.

In the past, it was common for an employee to stay with a company for decades. Career progress was more structured and more closely linked to tenure. Likewise, changes to roles and the employer’s business model were less frequent than today.

Now, however, average tenure is down and companies need to react to rapidly changing business conditions more quickly than ever.

Businesses need to find a scalable, meaningful way to improve engagement with their employees.

With employees squeezing more work, more experience, and more changes to their role into shorter, more intense periods of employment, an annual review hardly seems a fitting way to keep pace.

Add to this some significant cultural changes regarding the way we interact. We are now connected to a greater number of people than ever before, managing relationships more sporadically. We’ve come to expect a level of contact that reflects what is happening right now, not what happened 3, 6, or even 12 months ago.

Companies should be asking if annual reviews are still relevant to their workforce. Research conducted by management research firm CEB in 2014 suggests 95% of managers are dissatisfied with their review process, so the answer may well be no.

Instead, businesses need to find a scalable, meaningful way to improve engagement with their employees. According to Oracle’s recent “The Changing Nature of Employee Engagement” report, HR departments admit employee engagement is a top priority for them, but only half have an engagement strategy in place.

Conversation Is Key Element

At the heart of that strategy must be the conversation between employer and employee. It has always been the most important element of the annual review process; it is just the timing and the process itself that have not stood the test of time.

Perhaps quarterly engagement makes more sense, or engagement based on the completion of specific tasks or projects. It doesn’t need to take a lot of time or be based on dozens of criteria, it should be about short, focused “check-ins” that would build a more realistic and reflective record of an employee’s goals, contributions, and progress.

Any rethink of employee engagement should also reflect the digital age and make use of the technology available. Employees and colleagues already readily share their experiences and opinions on LinkedIn and other social networks, which offer an environment that is intuitive, informative, and engaging. It delivers something of value to the individual in a manner that resonates with our social and collaborative natures.

If we are to continue with performance management, then the systems that support the process need to offer an intuitive experience to users, deliver benefit to both the business and the individual, and lastly, need to have social interaction and collaboration at their core.

Andy Campbell is human capital management strategy director at Oracle. This post originally appeared on Oracle.com in the UK. Follow Campbell on Twitter: @Axcampbe

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