Recognition Programs and Annual Performance Reviews

What took them so long? Companies like GE, Adobe, Accenture, Deloitte and Netflix have eliminated their Annual Performance Review.  Many HR professionals believe this is only the beginning.  Managers who have worked for hours and hours of individual meeting and completion of appraisal forms know just how much a waste of time the majority of these appraisals came to be.

According to research conducted by CBE Global: 

• 95% of managers are dissatisfied with their annual performance reviews/management systems
• 59% of employees feel performance reviews are not worth the time invested
• 56% of employees do not receive feedback on what to improve
• 66% of annual reviews misidentify high performers regardless of stacked rankings
• 88% of HR managers say the annual appraisal process doesn’t yield accurate information 

A recent survey by SHRM found that 72% of companies conduct formal appraisals once a year but only 2% of the employees gave their employer an “A” grade for their performance management.

Hay solutions have stated several reasons why formal (annual?) appraisals are important:  

1. They make your people feel valued
2. They allow you to set new qoals
3. They can resolve grievances
4. They help to strengthen relationships within the team
5. They allow for refocusing on your team
6. They help provide oversight for current projects
7. They can help assess training needs. 

While these are certainly valid reasons, they don’t necessarily need to be done either annually or formally.  They are all excellent practices that can be easily included in the format and structure of your recognition program.

For years, the recognition industry has recommended that companies provide timely, honest performance feedback on ongoing basis and then recognizing employee performance when appropriate.  This type of consistent appraisal can have huge impact on how satisfied, motivated and productive their employees are.

Is it time for companies to consider a broader approach to recognition that includes the principles and budgets previously used in annual appraisals?  How much more effective would your recognition programs become?  

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net