Modern solution | Annual Performance Reviews are dead, long live the Performance Snapshot!

Annual Performance Reviews are dead, long live the Performance Snapshot!

By Amira Kohler, Innovation Director, Clear Review

For many, the term ‘per­for­mance man­age­ment’ is syn­ony­mous with the dread­ed annu­al per­for­mance appraisal. Many cringe at the term. As quot­ed in a 2019 BBC arti­cle, “annu­al assess­ments can be “wild­ly inac­cu­rate”, even “soul-crush­ing.”

That’s not sur­pris­ing; annu­al per­for­mance reviews (some­times called appraisals) have a num­ber of major flaws. And yet, they still sur­vive — a 2018 sur­vey by the research firm World at Work found that 80% of com­pa­nies still used for­mal per­for­mance reviews. So how have they sur­vived? They remain in place because most organ­i­sa­tions still need the out­comes of the per­for­mance review process, although they’d pre­fer to get these out­comes by a bet­ter method. Step for­ward the ‘Per­for­mance Snap­shot’ – a mod­ern solu­tion to an old prob­lem that has worked for hun­dreds of organ­i­sa­tions using Clear Review tech­nol­o­gy com­bined with a con­tin­u­ous per­for­mance man­age­ment process.

What’s real­ly wrong with per­for­mance reviews?

Tra­di­tion­al per­for­mance reviews had four major flaws: First­ly, they were bureau­crat­ic and time-con­sum­ing and there­fore deeply unpop­u­lar with man­agers and employ­ees alike. Sec­ond­ly, employ­ees dis­liked the tick-box exer­cise of receiv­ing a per­for­mance rat­ing, which crys­tallised a year’s worth of work into a sin­gle label or num­ber. Third­ly, there was an issue with recen­cy bias where­by an employee’s recent achieve­ments (or fail­ures) skewed the judge­ment of their man­ag­er. This lured savvy employ­ees to ‘gam­i­fy’ the process which fur­ther dis­tort­ed the results and led to inef­fec­tive and unfair out­comes. Fourth, evi­dence has shown per­for­mance rat­ings have no rela­tion to orga­ni­za­tion­al per­for­mance. (This was evi­denced in a 2012 Neuroleadership.com report which gath­ered more than 23,000 employ­ee rat­ings from 40 com­pa­nies and found no sign that rat­ings had any effect on prof­its or loss­es, reach­ing the damn­ing con­clu­sion that “per­for­mance rat­ings have no rela­tion to orga­ni­za­tion­al per­for­mance whatsoever”.)

So why have per­for­mance reviews con­tin­ued to survive?

Giv­en these sig­nif­i­cant flaws, why then have per­for­mance reviews con­tin­ued to sur­vive in 80% of com­pa­nies? Per­for­mance reviews are hard for organ­i­sa­tions to dump because they ful­fil two key pur­pos­es: first­ly, they pro­vide the forum for a ded­i­cat­ed dis­cus­sion about an individual’s per­for­mance and devel­op­ment. And sec­ond­ly, they enable employ­ee per­for­mance to be mea­sured and assessed. So, the log­ic goes, they may be flawed, but they are bet­ter than nothing!

Intro­duc­ing Per­for­mance Snap­shots – a dif­fer­ent, much bet­ter, way to achieve both these outcomes

At Clear Review, we have seen that organ­i­sa­tions can solve this conun­drum by com­bin­ing a con­tin­u­ous per­for­mance man­age­ment approach along­side our Per­for­mance Snap­shot func­tion­al­i­ty. Adopt­ing a con­tin­u­ous approach means that man­agers and employ­ees have check-in dis­cus­sions fre­quent­ly through­out the year, pro­vid­ing a reg­u­lar forum for a ded­i­cat­ed dis­cus­sion about an individual’s per­for­mance and devel­op­ment (thus achiev­ing the first out­come). Then at the end of the year they can use the data gath­ered from these dis­cus­sions to com­plete a tar­get­ed Per­for­mance Snap­shot. This pos­es a small num­ber of high­ly tar­get­ed ques­tions to iden­ti­fy key employ­ee met­rics around per­for­mance, top tal­ent, pro­mo­tion readi­ness or suc­ces­sion plan­ning. Our Per­for­mance Snap­shot func­tion­al­i­ty enables employ­ee per­for­mance to be mea­sured and assessed based on rich infor­ma­tion which the tech­nol­o­gy serves up at the key moment (achiev­ing the sec­ond outcome).

The outcome?

A sim­pler, more engag­ing process which dri­ves high per­for­mance and engage­ment whilst deliv­er­ing cred­i­ble, mea­sur­able met­rics based on empir­i­cal evi­dence built up over time through reg­u­lar check-ins.

What now?

We here at Clear Review are pas­sion­ate about deliv­er­ing great per­for­mance man­age­ment that works for man­agers, staff and HR to sup­port a smooth and pro­duc­tive way of mon­i­tor­ing employ­ees progress, help­ing organ­i­sa­tions and staff to achieve goals togeth­er. Over the next few months, we will be shar­ing more con­tent in the form of blogs, videos and webi­na­rs, around how to get the most of per­for­mance man­age­ment and explor­ing the theme “Annu­al Per­for­mance Reviews are dead, long live the Per­for­mance Snapshot”.

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