Why Do Annual Performance Reviews Squash Morale? Plus, 10 Ways to Do Better

Blog Credit: Jonathan Feldman, March 10, 2022 (Why Do Annual Performance Reviews Squash Morale? Plus, 10 Ways to Do Better | NetSuite)

In short:

  • You’re waiting a year to give significant documented feedback? Puh-leeze!
  • There is no perfect solution. This is improv jazz, but the correct riffs are pretty clear.
  • Here are some strategies to use reviews to aid retention.

You hate writing them. Your employees hate responding to them. Your boss hates reviewing them. So why are they still around?

I’m referring, of course, to the annual, dreaded performance review.

As with many horrendous things, the impetus for annual performance reviews comes from a good place. Everybody benefits from feedback. Leaders need a way to figure out which folks on their teams are doing well and which need improvement. Employees deserve to know where they stand. The people you most want to retain need the psychological safety of knowing that the boss has documented that they’re doing well or even performing exceptionally.

That’s all great. Except why on Earth do leaders think that it is sufficient to give substantive feedback once every 12 months? Think about any other human relationship. “Well, honey, remember when you didn’t take out the trash 11 months ago? That really ticked me off!”

Right. Who even remembers what happened five months ago?

A common complaint is that your yearly evaluation ends up being based on “what have you done for me lately?” I’ve seen 10 months of stellar performance wiped out tragically by a screwup in month 11. Not so great.

It’s also a problem in terms of the “catch up” employee. Ten months of phoning it in followed by two months of hammering it hard because raises are in the offing is also not terribly useful.

Another common complaint we all hear is that leaders are just playing games. In other words, they already know what raise they’re able and willing to give you. Now they go write a review to justify that action. Also not useful.

And, if we’re honest, nowadays nobody has time to sit down and pen the “War and Peace” of an annual performance review — nor does anyone want to read all of that blah-blah-blah.

So if you’re a smaller growing organization thinking that you should begin annual performance reviews so you can “be like a big company,” stop right there. It won’t work, and you shouldn’t.

What should you do instead?

Manager Tips for Better Performance Reviews

Spoiler alert: There is no perfect solution. Like most everything in leadership, this is improv jazz, not classical music. But the correct riffs are pretty clear.

Work within the system. I understand that most of us have corporate mandates about annual performance reviews. Fine, follow the mandate, work within the system, and file the darn thing. Don’t stop there, though. If you also color outside the lines a little by doing some of the things I discuss below, trust me, you will make that annual review process much less painful and, more importantly, way more meaningful.

Increase frequency. Since the core issues are created by giving documented feedback once a year, try increasing the frequency of both documented and undocumented feedback. My sweet spot is quarterly documented feedback, but maybe yours is monthly. For those of us who have mandated annual reviews, just massage those quarterly or monthly check-ins into the annual review, and poof, you magically have that annual review written — and it’s an accurate picture of the year versus a best guess written at the last minute.

Make check-ins a habit. Not everything needs to be documented. Getting together with employees on a regular basis and just … chatting … will allow you to keep your documentation to a minimum, which everybody will celebrate, especially you. Spencer Johnson’s best-selling book, “One Minute Manager,” was best-selling because it contains some essential truths. Small, frequent praise or corrections are both more effective and easier than holding everything back for weeks or months at a time.

Pick up the phone. Not everything needs to wait for a scheduled check-in! Whether you’re chatting with employees via Slack or experiencing the bliss of standing up from your Zoom screen and just calling someone on the phone instead, again, small praise or clarifying questions will go a long way towards clearing the air and reducing the number of issues that need to be addressed in documented feedback. Bliss!

Performance Review Dos and Don’ts

However you structure your regular informal and documented feedback, making it less of a painful process and more helpful and meaningful is all about how you approach it. If you’re looking to build a durable and effective workforce with low turnover, here are some dos and don’ts to keep in mind.

Don’t frequently cancel check-ins. Employees will conclude that they don’t matter to you (and they’ll be right). Employees who feel like they don’t matter become flight risks.

Don’t wait to give negative feedback. Bad news never gets better with age. And, the farther you are from an incident, the worse your recall of it is, whether you’re the employee or the supervisor. Remember, firing an employee is a failure of management. So don’t let things fester.

Don’t wait to give positive feedback. There’s nothing like your boss quickly catching you in the act of doing the right thing that makes you want to keep doing it and feel safe at work.

Don’t surprise employees during a documented check-in. Nothing that gets documented should be a surprise. It’s not fair to the employee, and frankly, it makes you look like a jerk. By the time something — particularly negative or corrective feedback — makes it to the documentation stage, you should have discussed it several times and given the employee adequate opportunity to address the issue.

Do say thank you frequently, both documented and undocumented. There is so much science around how gratitude is actually really good for you. Plus gratitude has a way of making the work feel more meaningful for the employee and of making the employee (shocker, I know) feel appreciated.

Do ask employees what you can do for them. Employees, especially new employees, are very reluctant to make an ask of the boss, yet sometimes those asks are small things that would be easy for you and make their work life incredibly better.

Do tell employees “I’m glad you’re here” — but only if it’s true. People need to know that you want them there; it’s part of that psychological safety net that lets them focus on their work without distraction. If it’s not true, obviously, don’t say it. There’s nothing that gets in the way of an employee relationship more than the blatant insincerity emanating from your lyin’ eyes.

Do be gentle with negative feedback. Feedback is a gift. Brutality — even verbal — in the workplace is not only a misdeed, it will dramatically backfire on you, and you’ll deserve it as you cry bitter tears while your best talent walks out the door. People see how you treat their colleagues. So identify missed opportunities and mistakes, for sure. But then ask, “How would you have done this differently?” instead of piling on. “What did you learn?” is always a great question, not just for the employee, but for you, too. Did you ask an employee to do something clearly outside of their expertise? That one’s on you.

Do ask employees if they have feedback for you. Make it clear that you too are open to negative commentary, receive it with grace, and act on it. Obviously, the “no brutality” rule applies to employee feedback as well, but remember: You hold a lot of administrative authority, so be gentle when sifting through feedback that is perhaps not said in the gentlest way, and try to identify valid criticisms, even if it’s wrapped in an emotionally hard-to-hear wrapper.

Do act on employee feedback. Act on it, then close the loop. Make it clear that you heard the feedback, and then double back with the employee after you’ve taken action. Not only will it boost your credibility with employees, I guarantee that it will help you retain them.

The core problem of the dreaded performance review is essentially that it’s way too little, way too late. The fix is to consistently engage in meaningful dialog all year long.

It takes work, it takes initiative to give positive feedback, and it takes gumption to give critical but non-brutal negative feedback. But it’s more than worth it to get away from the old-school and completely ineffective once-a-year model.

Jonathan Feldman is an award-winning chief information officer, speaker and writer. He was honored with Frost & Sullivan’s CIO Impact award; named to Government Technology’s Top 25 Dreamers, Doers and Drivers roundup; and frequently appears among lists of top CIO and IT influencers. Jonathan has been referred to as a pioneer of cloud computing, digital transformation and civic tech, with Forbes calling his efforts “IT done right.”

Jonathan co-authored Code for America’s open source book “Beyond Transparency” with Tim O’Reilly and others. His column with InformationWeek magazine, which won an American Society of Business Publication Editors award, started many industry conversations about positive IT transformation. He has spoken all over the world about remote work, the future of work, talent management, leadership and digital transformation, and he is often quoted in the media about these topics. He tweets at @_jfeldman.

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