Why Annual Performance Reviews are Just Like Christmas Shopping in February!

Do you know anyone who loves Annual Performance Reviews?

Forget about “love”! Do you know anyone who even likes Annual Performance Reviews? I don’t! Not a single, solitary soul!

And yet so many managers subject themselves and their direct reports to this agonizing process every year.


Well, in theory, the Annual Performance Review is supposed to be a time when we review the past year (yes, 12 whole months) with our direct reports, celebrating their achievements and pointing out their shortcomings, all in the interest of setting some “self-improvement” goals for the coming 12 months.

Who can remember all the achievements and shortcomings, going back 12 whole months? OK so we know our memory isn’t that good so we should make little notes throughout the year and slip them into the employee’s file.

Good idea. Just like doing my Christmas shopping in February! Another good idea, but do you know anyone who does it? Besides, of what use is it to your employee to relive a goof they made 9 months ago?

So why don’t we scrap the Annual Performance Review altogether?

In fact, I suggest we overhaul the entire Performance Management process. Here’s a proposal:

  • Establish your company Vision (what KPI’s will be part of the Vision, what are the current results for each of these KPI’s, what will be your 3-5 year Goals for these KPI’s)
  • Build ScoreCards
    • Begin with ScoreCards for the CEO and each member of the
      Leadership Team, then develop ScoreCards for the next level of management if there is one, and then all members of the Front Line Team
    • This process includes identifying each person’s Natural Talents, confirming their Best Role, establishing the connection between this role and the Vision of the brokerage, determining KPI’s and setting KPI goals and agreeing on Key Behaviours
  • Establish Review and Feedback process and execute
    • Weekly 10-minute Check-ins to establish accountability for execution of Key Behaviours and provide coaching opportunities to reinforce desired behaviours and redirect undesired behaviours
    • Quarterly Reviews to celebrate success (enforcing consequences will happen at the Weekly Check-in level, I think), fine tune or adjust ScoreCard content and provide data to Compensation System for Bonus calculation
    • Annual Review to celebrate success (enforcing consequences will happen at the Weekly Check-in level, I think), review Career Development progress over past year and set goals for coming year and to fine tune or adjust ScoreCard content and provide data to Compensation System for Salary and/or Bonus calculation

This may not be as good as doing our Christmas shopping in February, but based on our experience, this process boosts morale and significantly enhances results. That’s a pretty good 1-2 punch, wouldn’t you say?

I’d love to hear your feedback! Drop me a quick e-mail rick@ic3.ca.  Thanks and good luck!

Photo by eggeeggjiew