A question that came my way about eliminating performance reviews. Good idea? Bad idea? Here’s the question posed, and my response.
“My company has about 1,300 employees, and we are looking at possibly eliminating the annual performance cycle. Has anyone done this? If so, what has been the result, good, or do you think you’ll need to reinstate? We’re thinking of just providing employees with a year-end COLA/CPI adjustment versus merit based increases. I welcome any input.”
Eliminate the anxiety-ridden annual performance review? Yes.
Continue to manage performance throughout the year? Absolute necessity.
If the only reason your organization has performance reviews is to be able to defend compensation decisions then you’re missing a tremendous opportunity to improve communication, performance, productivity and profitability. Once a year reviews, especially if done solely to support a merit increase, have proven ineffective. They tend to wind up being one-sided monologues by the manager or “gotcha” sessions dreaded by the employee.
Your employees need objectives, direction and feedback and that’s the key to year-round performance management. You can read more about this in my article that appeared in Workforce Magazine.
And if you’re a member of SHRM, take a look at this article from HR Magazine for more tips. http://www.shrm.org/publications/hrmagazine/editorialcontent/2009/1009/pages/1009tools.aspx
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