A Case for Eliminating Annual Reviews

Articles regularly pop up about eliminating annual reviews. It’s a no-brainer that more satisfied employees, better production, and less turnover save money. Case studies and company experiences are still mixed though.

There’s little doubt that the time has come for a change. Like a lot of  “we’ve always done it that way” or “we have to do it that way for … reasons”, there comes a time when change is beneficial and necessary. Employees in large companies often go their entire first year of employment without having any idea what their goals  are or how their performance is being measured, right up until they have their first review. How does this help the company or the employee?

Small businesses are often in a position to implement such changes more easily. In addition, small businesses feel improvements more quickly. Yes, it’s necessary to keep records and document counseling. However, it doesn’t take any longer to do it now than it does to write a note, file it, and try to figure it out months later after the incorrect behavior becomes ingrained.

Meanwhile, since this idea may not get widespread implementation in the near future, employees need to be encouraged to ask for feedback and take constructive criticism with an open mind.  Improving the working conditions benefits everyone. Therefore, encourage your employees to be an active part of the team and take time to give carefully considered advice when you first notice a problem.

For a comprehensive discussion and some good insights, check out this article.

On the other side of the issue is this article.