Performance Reviews Are Still Relevant

Much has been written recently about the evolution of the performance review.  To judge from the past several years’ discussion on the topic, it wouldn’t be a stretch to think that performance reviews are a relic of the past, ready to be mothballed.

I disagree with the notion that performance reviews are antiquated, and I realize that I’m an outlier on this topic, but my take on formal performance reviews is that they’re both necessary and valuable.  There are three reasons why I believe that performance reviews, done correctly, remain extremely relevant in today’s business environment.

Performance reviews focus on the big picture.  Much has been written on the concept of “micro-reviews” — short, frequent conversations between a manager and their team member. The driving force behind the micro-review movement has been survey results and research on workplace attitudes exhibited by Millennials showing that this emerging workforce demographic wants frequent feedback, a fair process, and managers who have their best interests in mind.

Here’s the thing: micro-reviews are great. Immediately providing constructive feedback to your team member when it’s needed is absolutely the way to go. But relegating reviews to a weekly cadence of staccato micro-review sessions loses track of the big picture.  Is your team member tracking to long term goals? Do they see and understand how their role fits into the overall organization? Annual, formalized performance review conversations are a critical tool to use to accomplish these objectives.

Performance reviews are the cornerstone of professional development.  Professional development is a process that begins with the end in mind. If you don’t know where your team member wants to go, then you cannot be intentional about their professional development.

Formal performance reviews provide the manager and the team member each with an opportunity to describe the future.  Where does your team member want to be in three, five, and ten years? What role do they see themselves in?  What critical skills and competencies must they develop in order to get there?  It’s the answers to these questions that will provide the clarity required to make micro-reviews effective over the long run.

Performance reviews provide critical data.  Businesses are developing an amazing capacity to create actionable organizational development strategy from performance data gathered across the enterprise. Performance reviews are a major source of the data that enables this type of organizational development work to take place.

For these formal reviews to be effective, managers must invest the time to prepare, create and deliver a meaningful review for each member of their team. Gone are the days where managers can get away with going through the motions with an annual review process; leadership should be actively championing (and monitoring) the review creation and delivery process so that the content is relevant, specific, accurate and actionable.  The result is a treasure trove of data that can be used to improve the business.

Companies that kill their annual review process do so at the risk of losing a big picture perspective, hampering organizational development efforts and eliminating critical data sets than can impact the business.