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3 Ways to Shift from Annual Reviews to Real Time Feedback

This past year, I’ve spoken several times on the topic of performance reviews, about how to bury the old annual review approach and shift to a real-time, continuous feedback model in alignment with what companies have been doing since 2012.  If you’re thinking about this approach for your organization, I’ll be speaking again on this topic at the Michigan SHRM conference October 2017.

And in the meantime, here are 3 things to keep in mind to make the shift:

Strategize Compensation

The #1 question I get asked about this topic is, if we get rid of employee ratings (and yes, you should) how will we know how to give increases? This great chart from the Center for Effective Leadership outlines how a variety of companies have approached this issue – from “shadow ratings” to calibration sessions –  and the outcomes they experienced, like increased employee development and changes in pay more differentiated based on performance. Increases can be done without being tied to a specific rating.

Hire Trustworthy People Leaders

One of the benefits of the real-time model is that HR no longer has to police an annual process of chasing after review forms.  Performance communication with this approach is either done informally, day-to-day on the job, or companies use performance management technology that meets their needs of communicating immediate feedback across all levels of the organization.

The best way to ensure that this informal communication is happening is to have the right managers in place.  And by “right,” I mean a manager who is interested and invested in their employees’ development.  A manager has to be a people leader first and serve their team of people by staying in communication to ensure goals are being met, position requirements are met, the employee is progressing on his or her goals, and asking how they and the organization can help.

Re-Recruit Employees to Stay

With a real-time feedback approach, it’s still important to have an annual meeting with employees but use that meeting as a “re-recruiting opportunity”, more commonly known as a stay interview.  Learn how they feel about their working environment and find out how managers and the company can aid in improving any issues.  It’s more important than ever to retain good employees, low unemployment has increased demand on good talent and it’s easy to lose employees to the competition.

The good news is that just removing your annual review process may increase employee tenure – most employees are simply tolerating your current annual review processes!  If you’d like to learn more about performance management processes, we’re happy to help!

Catherine Schmidt
Catherine Schmidt
Catherine Schmidt, PHR, SHRM-CP, is Purple Ink’s Consulting Manager and has nearly a decade of experience managing various HR functions including recruiting, creating training programs, compliance, and performance development initiatives. She has worked in a variety of industries such as professional services, manufacturing, and non-profit settings. You can follow Catherine on Twitter @CatherineS_HR.

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