Are employee reviews really that important? After all, there’s been a lot of news about how big companies are getting rid of their annual performance reviews. Firms such as Adobe and Microsoft famously ditched annual performance evaluations in favor of alternative systems.

And if your company’s performance isn’t improving and employees are less engaged than ever, you may be tempted to chuck your review processes into the company ashbin, between the fax machine and typewriter.With managers spending an average of over 200 hours each year on performance reviews, you’re in good company if you believe that reviews are an annual task that is required, yet feel less important than most other work-related responsibilities.


To Dump Or Fix? The Case For Burying the Annual Review Process

You can’t deny that there’s a growing chorus of voices in the corporate world asserting that the performance review is dead. The arguments are that the annual assessment is outmoded and ineffective. A survey by the consulting firm, Achievers, found that only 2% of HR people think that performance appraisals do anything useful.The same study found that a mere 9% of employees said that they are “regularly recognized” for their work, skills and contributions. And according to an Accenture survey, over a third of employees said that they would quit a job if they don’t feel that their efforts are recognized or appreciated.

In response, some estimates are that more than one-third of U.S. companies are abandoning the traditional appraisal process.


Appraisals: Too Troublesome to Leave Alone, Too Important to Discard

Since appraisals are often regarded as a nuisance, their main purpose – to identify individual and organisational performance and improvement – is forgotten.

Thing is, companies that have done away with employee reviews have seen a decline in overall performance. A recent study found that even though managers had more time after getting rid of the appraisal process, informal conversations with team members took a downturn. Also, companies that got rid of performance reviews reported an uptick in the amount of top performers who weren’t satisfied with pay differentials. Most troubling, employee engagement went down by 6%.

Sure, the traditional way of reviewing employee performance is seriously out of step with today’s working world. But the importance of the employee review process cannot be overstated. Even though traditional annual appraisal systems are often not well thought out, their intentions are noble. Performance reviews are crucial if a company wants to improve organizational efficiency, since they ensure that individuals perform to the best of their ability, develop their potential and earn an appropriate compensation. Without such a practice in place, many managers would probably tend to shy away from such one-on-one discussions.

So, by shifting the emphasis from attaining last year’s goals and avoiding mistakes to professional growth and innovation, many companies are developing ways to modify the employee review into a process that facilitates a rhythm of giving feedback.

bob, the cloud-based HR and benefits platform is a case in point. To meet the needs of its customers, bob developed a module whose features fulfill the requirements of a company’s review cycle. The feature enables self-assessments, manager assessments, manager summaries, and optional rating.

The type of cutting-edge software that is increasingly being embraced by HR professionals focuses on desired future outcomes. Such an approach encourages managers to work with their employees to first identify the objectives that will make the biggest impact, and then determine the steps and skills needed to get there.


Conclusion: Old School’s Out, Data’s In

Old-school performance evaluations are notorious for the time they waste and energy they sap. However, companies today increasingly have access to technologies that make it possible to gather data throughout the year, which ensures that employees are able to follow up and review feedback as needed. Meanwhile, managers have easier access to compiled feedback.

By removing the outdated elements of performance reviews and instead focusing on ongoing feedback and employee development, the benefits of embracing performance reviews are becoming crystal clear.


About Ainatte

Ainatte is a Product Manager who is leading the development of bob's Performance Management. For inspiration, she likes to bring her dog to work.