Do you currently conduct annual performance reviews with your team? If not, you could be missing out on a valuable opportunity for both your organization and your employees. Let’s dive into why these annual performance reviews are so important. Keep in mind, performance or annual reviews have their own drawbacks and risks.
Assisting Struggling Workers
If you’re like most managers, you are probably stretched thin. You have goals to meet and budgets to allocate, and projects to oversee. This can make it difficult to spend much time with individual workers, or to recognize when someone is struggling. Annual performance reviews give you the opportunity to identify workers who are facing challenges and to develop individual plans for success.
Recognizing Superstars
Your team undoubtedly also contains some superstars—employees who consistently work hard and strive to make each project as good as it can be. Annual performance reviews allow you to turn the individual spotlight on those team members, giving them the rewards they have earned. You can also use the review process to determine which ones might be good candidates for promotion, possibly onto a management track.
Discussing Future Career Goals
It’s human nature to always seek something more. Few employees are genuinely happy doing exactly the same job for years on end. But how can you know what your team members want to do next if you don’t make the time to sit down and discuss their career goals? The one-on-one nature of an annual performance review makes it the perfect time to have this conversation, and to help each worker build a personalized career path.
Boosting Engagement and Retention
It’s a job hunter’s market, and employees know that they can easily find employment elsewhere. If they feel seen and validated, though, they are more likely to engage with the company. This makes them less likely to leave. Annual performance reviews let you connect more deeply with each worker. You can learn their motivations and develop customized incentives to boost retention.
If you’re busy, it can be easy to let annual performance reviews slide. But these one-on-one meetings are a win-win for both the company and the team. So it’s well worth the effort to make time for them.
The Counter Argument
While employee reviews can certainly have their benefits, they can bring with them their own challenges and risks.
Performance Review Bias
It is natural human behavior to take a liking, or disliking of someone. This greats a bias and can skew an objective employee evaluation. Reviews or no time to play favorites, but inevitably they occur. Also, a bias can occur if recent performance or an action is still top of mind by the reviewer. A year’s worth of positive performance can be skewed by a recent bad event.
Reviewers Capability & Expertise
Conducting an annual review requires training – lot’s of training. If that training hasn’t occurred, you run a significant risk the review and how it is conducted may be marginal. If the review is negative and it is conducted by a reviewer who he/she themselves of marginal performance, the outcome is generally not good.
Pay Expectations
Reviews = Raises. Like it or not, employee reviews equate to raises. If you give a review, the employee will expect a raise – at least a cost of living raise. If a raise is not given, it will lead to poor morale and is demotivating.
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