min read ·
January 17, 2020

Why you should kill annual performance reviews

Experience Design Practice Lead

Ruben Cardoso

With over 12 years of practice in product strategy and design, Ruben is passionate about people and problem solving through innovation. He is a strong and empathetic leader inspiring teams to deliver the best customer experiences.

Annual performance reviews are a nightmare. They're a logistics and scheduling mess, a lot of preparation needs to go into them and a lot of people need to be involved in every single employee's review. Dozens of 360° feedback from peers and clients are collected and organised for every employee in a business. It is massively focused in the past and everyone tries to remember examples from the previous year and rush many reasons why they should be getting a raise. It puts a lot of team members and leaders into a lot of pressure and ultimate just instils fear and creates frustrations.

So why do we still do them? 

Because it has always been that way. It is what people expect from the traditional businesses and corporations most people worked with throughout their lives. Because it is the only way we have to measure who should be rewarded. Salary reviews always had a timeframe to them, it gives them certainty, people look forward to them. Ultimately, it makes them predictable, they're one-off events that are capturable and recordable. Put simply, leadership and employees don't know better, so if it is not broken, why change it... 

Because they are broken

Employees don't just want a salary increase in their jobs, there are more and important things to keep them in a particular role or company. They want purpose, they want to feel valued and that they're contributing to a higher goal. They want an opportunity to safely learn and grow. Annual performance reviews barely help in any of these things.

How can we move away from them?

I believe three things will help build a culture that will enable this:

  1. More conversations
  2. Better conversations
  3. Actionable conversations

1. More conversations

Instead of relying on a single, long, sometimes difficult conversation, making up time for managers, employees and peers to have more conversations. Companies need to instil this behaviour and incentivise regular short 1-on-1 meetings, weekly or bi-weekly. This allows the people involved to discuss matters often and timely when they're fresh and not forgotten.

2. Better conversations

Conversations shouldn't be driven by past behaviour or some monetary incentive. Employees should be discussing their purpose, their growth, their aspirations and goals (including monetary), their values and how they're aligned with the business they work for. Conversations should be future-focused, open and ultimately honest. Feedback has to be bi-directional, not just one-sided. This is a massive effort from anyone involved, it requires building empathy and emotional intelligence on both sides of the dialogue, but it pays off. 

3. Actionable conversations

Conversations don't matter if they don't lead to behaviour change, that's why they need action! 1-on-1 meetings need to be structured in a way that enables this, with a clear shared agenda that is set upfront. These need to be recorded, notes have to be taken and shared with the people involved. Any actions need to be noted down and revisited in follow-up meetings. This keeps everyone accountable and instils progress. 

At Fabric we believe this is the way to move our company forward, to empower our employees and a better culture. Performance reviews should happen whenever they're needed and employees should feel in control of their progress, both personally and in their career. We believe salary reviews should happen whenever people deserve them, not when a schedule mandates them.


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