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If Not the Annual Performance Appraisal, Then What?


The annual performance appraisal might be among the most reviled of time-honored workplace traditions. And it makes sense.

Managers must invest countless hours in a process that endeavors to boil a year’s worth of a human being’s contribution down to a series of check boxes, numeric ratings, and bulleted highlights. Employees—those human beings whose contributions are being over-simplified—may look forward to a chance to discuss their performance (since those conversations generally happen infrequently) but often leave feeling empty, demoralized, and undervalued.

As organizations like Microsoft, Adobe Systems, and The Gap jump ship on the traditional performance appraisal and the press continues to pummel this business practice, one might wonder if the annual performance review will soon go the way of the dinosaurs. Likely not! At least not until the value it’s intended to bring can be re-created through other means.

Performance appraisals are designed to serve multiple masters:

  • At the organizational level, they provide critical information for workforce alignment, succession planning, compensation calibration and budgeting.
  • At the manager level, the annual appraisal offers an opportunity to step back and thoughtfully consider the performance of each employee and the kind of support required to sustain and elevate their contributions.
  • And at the employee level, it’s a chance to sit down and hear how they’re doing— what they’re doing well and how they can improve. It’s an opportunity for connection, recognition, learning, and motivation.

But let’s face it: In reality, the performance review represents the assurance that managers and employees connect at least one time each year around issues of performance. And whether the current system actually delivers this outcome in a meaningful way really doesn’t matter. It will be difficult for organizations to abandon this time-honored tradition until there are new practices that accomplish (probably better) what the annual performance appraisal is fundamentally in place to do. The high-profile organizations that are eliminating annual reviews promise monthly touch-bases instead. But, given the pressures on managers today, we’ll just have to see how that plays out over time.

So, if you’re a leader in an organization today, you have a unique opportunity to be on the “bleeding” edge, to innovate your own approach to management, and to begin experimenting and developing practices that could one day become the alternative to the annual performance review. Here’s a list of ideas to get you started toward perhaps earning the right for performance appraisals to be eliminated in your organization.

  • Send a few Sunday night LOVE letters. Rather than battling the “Sunday night blues,” take a few minutes to reflect on the past week in preparation for the coming one. Consider the positive things that occurred and shoot out a few “Little Observations of Value or Excellence” (LOVE) emails. Just a sentence or two of recognition every couple of weeks or months can do more for motivation and engagement than a typical performance review.
  • Forward frequently. Make it your practice to forward along customer comments and compliments from peers and superiors to employees. Let everyone know—immediately and more directly—how their performance contributes to the bigger picture.
  • Turn the tables. Sharing your observations and feedback provides helpful information; but don’t assume the full burden of performance assessment. Engage others in a two-way dialogue about performance. Routinely ask employees questions like: What have you accomplished that you’re most proud of? What’s going well for you? Where do you feel like you’re falling short? What support do you need to perform optimally?
  • Encourage feed-“back-and-forth.” Any review of performance is more accurate and reliable when conducted by those closest to the work. Employees are in the best possible position to know the truth about how their peers are doing. So train them. Support them. Encourage them to share feedback generously and constructively with each other.

Take proactive steps today to build performance-related conversations into the fabric of your workplace. Make this kind of dialogue a regular and natural feature of your organization’s landscape. And who knows? Perhaps your organization will realize that it no longer needs to impose artificial processes and systems to handle what’s already happening—and you might find yourself and your organization bidding adieu to the performance review.

Image: (c) Can Stock Photo / doodershop


  1. This is a topic near and dear to my heart, Julie, as you know. Addressing gaps and closing them is what makes sense to me – if the performance is below what the organization deems as the minimum required. But that takes conversation, trust and encouragement. Incremental steps to closing a gap indicate improved performance. Also, finding a way to acknowledge and encourage performance that exceeds organizational requirements is a way to capitalize on employee strengths – where the emphasis should be, not focused on perceived (read: judged) weaknesses.

    • Well said, Judy. I love your use of ‘incremental’ here. Incremental conversations over time create an ongoing dialogue around performance versus what is too frequently a ‘one and done’ activity. Thanks for joining this conversation!

    • Thanks, David. I’d be curious to hear what you’re learning from organizations that are moving in this direction!

  2. I love your idea of doing Sunday night LOVE letters!
    I agree that annual reviews alone are ineffective. I recommend monthly 1:1s where the team member starts the discussion, not the manager. I agree with Judy above, that the focus should be on identifying gaps and closing them, and monthly 1:1s are a great way to do this. I also encourage managers to be clear on the development stage of each team member – are they being ‘trained'(performance gaps), ‘coached’ (proficient) or ‘mentored’ (expert) – because the purpose of 1:1s will be different for each. 1:1s are also an opportunity for the manager to get feedback on what she could be doing to better serve her team.
    The annual review can then just be a quick summary of what went well, what didn’t, and what the goals will be for the following year.
    Of course, this format only works in companies that make “coach and develop your team” the top performance expectation for their managers and provide them with the proper training and resources. That’s the real gap that needs to be closed.

    • Your distinction around development stages is so on target! This helps to focus and optimize each conversation, allowing one to build upon the other so that – as you say – the annual review is an easy summation of an ongoing dialogue. Thanks so much for your insightful contribution to the conversation, Bernadette.


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