Performance Reviews: Re-thinking How We Evaluate Employees


Today’s challenge: Have a discussion with each of your employees and ask them how they feel about annual performance reviews. Just by reading that sentence, you’re probably shifting uncomfortably in your seat, because you already know the answer.

Annual performance reviews are stressful for all parties involved. Managers end up spending days gathering information, while employees waste time agonizing over how the review will play out. In addition, studies have proven that traditional annual reviews are ineffective and have negative impacts on motivation and productivity.

So, what now?

At Valoro, we have reconsidered the way we evaluate performance, and as a result have kicked annual performance reviews to the curb. We are going to encourage you to do the same.

We are approaching a new year, and with that we need new traditions. So, it’s time to say: Ciao, APR! (side note: it sounds better in an Italian accent)

Here are our ways to start you re-thinking the way you evaluate performance in your business.

1 Quick Check-ins On The Regular

Ever read the One Minute Manager? Do yourself a favour!

We all know that nothing good comes from employees when they are micro-managed. But, this doesn’t mean you need to go on a complete authority hiatus. In fact, employees need to know what they’re doing right, and where they’re messing up.  

This all comes down to quick check-ins that address performance, goals and culture issues, before they become bigger problems. An added bonus of regular, quick check-ins is that they create a work environment that includes transparency and honesty.

Hold quick meetings with each of your employees, and ensure they fully understand their role in the company before setting targets. Set times either weekly or bi-weekly to have a quick catch-up with them, and address any problems they may have in reaching their target. It’s as simple as that.

2 Separate Compensation Reviews

One of the main reasons companies hold annual reviews is to quantify how performance translates to future remuneration and promotion.

The problem with coupling performance and promotion decisions, however, is that it can cause employees to feel like they are in an adversarial conversation, rather than a collaborative one. This experience can feel like the company is not truly supporting growth, and is finding ways to nitpick to avoid granting a salary increase.

Needless to say, the answer is to decouple the appraisal from the compensation review. Instead, listen to your employees and understand what their own professional goals are. Perhaps they are in a position that doesn’t highlight their strengths. Set goals tailored to their position, and rather review them on that.

3 Quarterly Performance Appraisals

We’ve spoken a lot about setting goals with each employee. But, that needs to amount to something, right?

As it is, many companies break up the year into quarters. It’s a natural time to look at company wide financials, and either re-affirm or re-assess goals. This is a great time to look back on your conversations with each employee, and see how they’ve performed relative to the goals that have been set for them.

Have discussions with them about what their future might look like within the company, and how that relates to remuneration. And when it comes to remuneration, be clear about when employees could expect that to happen.

In conclusion, quick catch-ups are the new APR. We cannot continue playing with the emotions of our employees once a year. Quick, fast bursts of feedback are far more effective, and keep your employees motivated to better themselves.

Are you bringing out the best in your employees?

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