Annual Reviews, common mistakes and how to do them better
Aaah January and the perfect month for Annual Reviews. Well maybe. They’re happening anyway. So what about them? Worth the bother? We’re obviously going to say yes, when done well, they can be motivational, set expectations for the year ahead and support wider business goals and done badly, well, they can just feel like a pointless tick box exercise.
Lots of organisations struggle to get real value from annual reviews, and it’s usually because there’s an issue with how the process is designed and delivered. Here, we unpick three of the most common mistakes and how to avoid them.
Treating it like the only opportunity
The annual review should not be the only opportunity to discuss performance, but this is a trap often fallen into by employers. Employees should never be hearing about major issues for the first time in an annual review; likewise, waiting 12 months to recognise good performance doesn’t work either.
How To Do It Better
Use annual reviews as a summary rather than a one-stop shop. Have regular check-ins throughout the year, quarterly or even monthly, depending on the role and your business needs. Regular conversations and connections mean no surprises when the formal review arrives.
Dragging Up The Past
Reviews can often be a talking shop, dissecting what went wrong months ago. Reflection is important, but being overly focused on past performance can be negative and unproductive. Employees will be much more engaged when reviews help them look forward - not back.
How To Do It Better
Balance reflection with progression. Use a simple framework? What went well? What could have been better? What do we want to achieve next?
Shift the emphasis towards future goals, skills development and career aspirations.
All About The Money
Remuneration is important, but when the formal review is primarily about salary, the quality of the conversation suffers, and the review doesn’t really serve its purpose. It turns into a salary negotiation, which is a conversation for a different time and place; it can also lead to unwanted tension.
How To Do It Better
If you can, keep the performance conversations separate from the pay decisions. If they must be linked, be transparent about how decisions are made and what factors are considered. Be sure to create space in the review to talk about learning, growth and long-term potential - not just numbers.
Annual Reviews That Work For You (and your employees)
Annual reviews can be incredibly useful and provide a great framework for the year ahead, but they’re not a once-yearly thing (despite the name), they need to be part of an ongoing performance review cycle, be fair, consistent and well-managed and support the goals of the business and the employee - because one doesn’t work without the other.