There’s a growing perception that annual reviews are becoming outdated in management. While I agree that regular, year-round performance discussions between managers and employees are equally important, annual reviews remain a key part of managing employee performance effectively. They mark the beginning and end of agreements between the organization and the employee. It’s crucial not only to align on what we aim to achieve but also on how we plan to do it. During annual reviews, we:
· Assess the results of the past period
· Agree on new priorities and goals
· Plan how to acquire missing competencies
· Provide feedback both ways
· Discuss career development aspirations
You may have heard about or experienced yourself, that in some organisations performance reviews are ineffective or conducted merely as a formality. Why does this happen? There are many reasons, but here are a few:
· Lack of openness in the organization's culture
· Unclear links between performance and incentives
· Autocratic leadership style
· Insufficient knowledge and skills on how to prepare for such meetings, lead them and provide feedback
Even the best performance management model won’t work if leaders—whether senior or middle management—don’t believe in it and lack the motivation to implement it. That is why it is important to involve leaders in cocreation or adaptation process of the model. This might be the way to demonstrate its real value and motivate management to employ it.
Another important component for effective performance reviews is leadership competencies, i.e. knowledge and skills to act. This includes setting clear goals, understanding criteria for evaluating employee performance results, providing feedback, fostering open communication, etc.
Leadership skills are not innate; they are learned. Similarly, performance management models cannot simply be copied from another company where they work well. It’s not enough to know what performance goals or compensation systems motivate employees in a competitor's organization or how often their managers hold discussions with their teams. Each company must develop its own HR management models tailored to its unique strategy and culture. Every business is distinct, and so its solutions must also be unique.
ExpertLab professionals are here to help. Contact us at jurgita.ruzgiene@expertlab.lt.
