Traditional performance reviews don’t garner the results most managers are seeking. Managers don’t like giving them, and employees dread receiving them. Performance reviews were useful back when a company’s success was tied directly to the productivity of individual employees, but most businesses are now more collaborative in nature. In addition, most managers don’t feel comfortable giving annual reviews and employees can sense their discomfort. While the majority of companies still use performance appraisals, this is going to change rapidly as more and more companies come to terms with how ineffective they are. Here’s why you no longer need annual performance reviews, and what you can do instead.
Provide Real-time Feedback
Today’s employees don’t want to wait a year to know if they’re performing well enough. The wait is stressful. They want honest and immediate feedback. Consistent, real-time feedback is more personal and more helpful. Social media and mobile apps are making it easier for managers to communicate with their team members and give them faster, more consistent feedback. This also encourages feedback to serve more as a conversation and less as a grading scale.
Perform a Gap Analysis
A Gap analysis can be a great tool to improve your team’s performance. Gap analysis is a reporting process that compares actual performance with desired potential. Gap analysis allows a company to see where they are and envision what they want to become. The first step of a gap analysis is to analyze the current state of your business. You want to look at team methodologies, the number of weekly sales calls, profit numbers, and other details that provide a general overview of the current state of affairs. The next step is to figure out where you want the company (or team) to go. Once you know what your objective is, you can start thinking about the milestones you need to meet to reach that objective. You have to identify the gaps in your company or team, or the difference between where you are and where you want to be, and then find strategies to bridge those gaps. Gap analysis is a much better way to improve performance than traditional performance reviews because it provides a strategic way to devise solutions to current problems.
Employees often need coaching and guidance because processes and technologies change. If you think about sports, athletes aren’t coached once a year when the season is over. They’re coached throughout the season. Real-time consistent feedback is much more in line with how most people learn and improve their skills. If you want your team members to live up to their potential, you have to coach them to be their best selves. Annual performance reviews don’t accomplish this.
In a culture where information is always just a click away, employees don’t want to participate in traditional end-of-the-year performance reviews. They want managers to give them feedback right away, so they know if they did their job well and know how they can improve.
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