AKF Partners

Abbott, Keeven & Fisher PartnersPartners In Hyper Growth

Stop Doing Annual Reviews

It’s annual review season again and lots of you managers are probably swamped trying to write pages of feedback, both positive and negative, for your employees. My advice for the coming year is to stop doing annual reviews. Workers today, millennials especially, don’t want to wait for a review or feedback once per year. This cycle was fine back when employees worked for a company for 30 years and could take twelve months to work on last year’s deficiencies. Today’s world is one of instant updates (Twitter, Facebook, etc) and a career comprised of stops at many different employers.

A BLS news release published in June 2008 looked at the number of jobs that people between the ages of 18 and 42 held. On average, men held 10.7 jobs and women held 10.3 jobs. Both men and women held more jobs on average in their late teens and early twenties than they held in their mid thirties. Holding 11 jobs over 24 years averages to holding each job slightly over 2 years each. If you wait for an annual review to provide feedback the employee is likely half done with their tenure at the company.

We argued in a recent post Lower your standards and build a better team that the standards for hiring should be lowered. The reason is that we are unable to predict future success based on past performance in a different environment (different employer, different culture, etc) and academic prowess isn’t likely to be a good indicator of job performance. A couple hour interview doesn’t net a better result. Said more simply, we should hire more people but make the cuts way faster. This is especially true when employees, great or poor performers, are likely to leave in 2 years.

Give feedback and rewards quickly. Why should salary increases occur only once per year? When someone performs well or takes on additional responsibility, give them positive feedback and reward them. Today’s employment environment calls for fast hires, fast feedback, and fast cuts.


Comments RSS TrackBack 3 comments

  • Wabb

    in February 28th, 2010 @ 11:09

    Fish has great points in this article. I’ll add one more viewpoint. Just consider the futility of most annual review processes. Very often they are coupled with merit increases or bonus payouts and as a result everyone is focused on the money rather than the coaching aspect of the review.

    By performing more frequent reviews and moving away from an annualized process the manager can give more timely and actionable feedback. Gone is the wasted time of trying to remember accomplishments from 11.5 months ago. If done monthly, progress can be discussed in a semi-formal basis. Feedback (ideally on a 5 to 1 or 7 to 1 good to bad basis) can be given in time to help correct behavior or reward success.

    Perhaps more importantly, the merit increase evaluation can happen on its own, allowing employees to focus on performance 11 times out of 12 meetings rather than on the monetary implication during the one scheduled performance discussion.


  • Randy

    in August 29th, 2012 @ 11:54

    Another great article…
    At Square we try to do 360 degree feedback twice a year. However, I believe we need to foster an environment of continuous feedback, both positive and negative. Most companies will give negative feedback immediately.. the positive feedback comes at the end of the year when you receive (or not) a raise.


    • fish

      in August 29th, 2012 @ 15:04

      Great point Randy, we often give negative feedback immediately but not positive.