Farewell to Performance Reviews

Posted by [email protected] on Nov. 26, 2019  /  Management/Leadership  /   1

It’s that time of year again; time to sit down with your employees, review an entire 12 months of work, and hopefully dole out positive praise, and maybe even a raise or bonus. Annual reviews are an increasingly unpopular practice that most professionals, from CEOs to administrators, dread facing. Beyond the negative emotional response many have, studies have found that traditional annual reviews have no effect of how employees do their jobs. In 2015, six percent of Fortune 500 companies like GE, Adobe, and Facebook had completely removed annual reviews from their process. These companies have since shared incredible results, as Lighthouse notes: “Adobe reportedly saved ‘approximately 80,000 hours of our manager’s time in the annual review process; and saw a 30 percent reduction in voluntary turnover.’ GE was able to ‘drive a fivefold productivity increase in the past 12 months’.” So if annual reviews are ineffective and becoming obsolete, how should we evaluate employees? Or processes? Or determine raises and bonuses? Here are three ways companies have changed the game when it comes to reviews.


  • The Real Time 360

Inc. Magazine covered this method extensively in early 2018 and it’s currently being used at major companies like Goldman Sachs. The general idea is to utilize all staff members to regularly review all staff members. An employee interacts with many other employees, not just his/her manager. Therefore it would stand to reason that team members beyond the manager would have valuable feedback to share about someone’s performance. Getting everyone’s feedback allows for a more “360-degree” view of someone’s performance.


  • One-on-One

If having all staff members involved seems like the wrong strategy for your company, perhaps the One-on-One would work better. In this scenario, as the name implies, the set-up is more traditional with one manager and one employee talking. But there are some key differences, the first of which is frequency. Utilizing this strategy requires ongoing, continual one-on-one meetings between manager and staff specifically to check in on performance, attitude, process, etc. This may mean once a quarter, or it may mean once a week. The goal is to make sure it’s more frequent and allows for the opportunity to address issues or reward results in a more timely matter. Additionally, this methods allows room for two-way communication. It’s about what a manager needs from his/her team member as well as what the employee needs from this/her manager.


  • Stay Interviews

This method basically takes the “exit interview” concept and turns it on its head. The goal of a stay interview is to have open dialogue with an employee about why they continue to work for your organization. What’s great about this method is, not only do you get feedback from an employee on how they’re feeling, you are also given an opportunity to build trust with that employee, and it gives managers and opportunity to evaluate employees from a very unique perspective. Again, the goal is to do employee stay interviews regularly and as a result many companies have seen increased employee engagement, lower turnover, and higher company loyalty.


Final thoughts:

There’s no one right way to review and evaluate employee performance, but the science is strongly pointing to a clear wrong way. As you look at your processes and determine what new method may be best for you, consider two final key elements that all of the above methods specifically discuss. First, separate money from the process. If employees aren’t going into a review worried about how they’re going to pay their bills if they say the wrong thing, you will get significantly more value out of the process. Secondly, be more frequent. Today’s society moves at such a fast rate, annual reviews just won’t cut it. If you want to retain talented people and effectively train employees, you have to be as responsive as the world around you.


About the Author: Lindsay Konlande currently serves as the Associate Director for IREM Houston. Lindsay earned her Bachelor Degree in Communication from Texas A&M and has a decade of experience in marketing, public relations and copywriting.

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  1. Mark Wright

    Dec. 6, 2019

    Very well written article. It confirms my belief that the formal performance review process is the least productive way to identify and reward high performers. I vote for a regular one-on-one visit to stay in touch with changing conditions. For a weak or marginal performer these visits set the stage for coaching.



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