Why Getting Rid of Your Annual Reviews Won’t Work

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You want to get rid of your annual performance reviews— and rightfully so. Nobody looks forward to those stressful, once-a-year meetings.

But simply getting rid of annual reviews isn’t a good idea. You’ve got to replace them with something better.

The “good” old days

The annual review process is clunky and antiquated, harkening back to the days when job security was the norm, employers and employees were happy sticking together for the long haul, and regular raises were pretty much a given. (Two martini lunches may have also been a thing.)

In this Mad Men environment, stability and consistency were the names of the game. Getting together once per year to review standard processes in a standard format was standard fare. Meeting annually to document last year’s performance and this year’s raise was generally seen as good enough.

But times have changed.

The workforce is much more dynamic and diverse. Business and technology are rapidly evolving and changing. Processes change. Consumer expectations change. Employer/employee expectations change. Technology and markets change. And, perhaps most importantly, employees are more mobile than ever.

If you wait an entire year to discuss employee performance, processes, metrics, needs and expectations, you will be having two completely different conversations. If that person is still on staff.

In the current business environment, stability and consistency can lead to a slow and painful death.

An inefficient model

Let’s think about things we do once a year, shall we?

  • File taxes
  • Cook a turkey
  • Try not to forget Valentine’s Day

Sure, you may be pretty good at some of these things. But imagine how much better you’d be at them if you did them more regularly. Chances are these skills would begin to come naturally and these occasions would be much more pleasant for everyone.

Let’s face it. You’re not going to be great at something you only do once a year, which is all the more reason to ditch the annual review process, right? But simply getting rid of it isn’t a good answer. Moving from awkward, inefficient feedback to no feedback won’t solve your two basic problems.

1. Both you and your employees need to talk about what’s working and what isn’t.

Employers need a workforce that can deliver results, and employees need to be clear about what those results are and how to best achieve them.

You can replace the annual review with a system for delivering timely, relevant feedback on a regular basis. Doing so will make performance management much more effective and much less stressful and intimidating. This is definitely a step in the right direction. It may even be the magic fix on the employer end of the equation.

But there’s a second piece to the performance puzzle that can’t be ignored.

2. Employees don’t just want feedback and kudos. They need to feel valued and appreciated.

Which means you need a plan to address career paths and, more importantly, compensation.

If you want your employees to stick around, they have to be able to see a future for themselves in your organization. Having weekly or monthly check in meetings with employees is great! And it would make sense not to talk about compensation during each of these sessions, because that would be serious overkill. But if you take compensation out of your feedback loop and just never bring it up, you’re asking for trouble.  

Like it or not, your employees expect to be recognized, not just with praise and accolades, but with raises. Sure, they may also want new titles, responsibilities, and promotions. But without an increase in compensation, all you’re doing is rewarding high performers with more work. Even if that’s truly not your intent, it’s how your staff will feel.  

Talking about compensation and pay increases is a natural part of the annual review process. So if you want to ditch the annual review, you’ll need to find a way to work those compensation conversations back into the rotation.

Feedback is great, but it isn’t everything

Creating a culture that doesn’t value employees is a surefire way to kick them out the door. But positive feedback, praise, and heartfelt appreciation won’t necessarily convince them to stay.

Employees associate high performance with increased pay. And many of them think the only way to get a significant bump in compensation is to change jobs and/or companies.

Don’t let this be the accidental message you’re sending your team. As you let go of annual performance reviews, make darn sure to put processes in place that address employee development, career paths, and compensation.

If you don’t, your employees will go looking for these things somewhere else.

 

Content provided by Q4iNetwork and partners

Photo by  Antonio Guillem

Compliance: It’s Not Just About Avoiding Risk

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Some businesses think staying in compliance is all about reducing risk and staying out of trouble. But companies that approach compliance as a way to help achieve their overall business objectives will do far more than avoid fines. They’ll build organizations that produce happy and productive employees, loyal customers, and a healthy bottom line.

The relationship between compliance and culture

For business owners, industry rules and regulations are a fact of life, and they can be used in several different ways:

  • As a threat to keep employers in check
  • As a set of rules to keep employees in check
  • As a helpful tool to make your workplace better, safer, and more pleasant for everyone

Now, which one of these three tactics do you think is going to make your business a more enjoyable place to work? Entice new employees to jump on board? Result in a more engaged and productive team?

Yes, you can control your team with threats and rules, micromanage behaviors with fear-based incentives, and rule with a culture of discipline. Or you can use compliance as a way to help you take care of your people and your business.

What’s your motivation?

Let’s think about some of the various aspects of compliance and approaches you may have taken or witnessed in the past.

Harassment

Is your main goal to avoid expensive litigation? Or is it to create a healthy workplace where everyone feels comfortable and respected?

Discrimination

Are you following EEO practices because you’re afraid of being sued? Or are you committed to fostering a diverse workforce with a variety of talents, viewpoints, and experiences?

Payroll

Are you paranoid about compliance because a screw up will cost you back pay plus any added fines and penalties? Or do you value your employees and want to make sure they feel appreciated and get paid correctly?

Benefits

Are you offering health insurance, sick time, and leave options because the law says you have to? Or do you want to invest in keeping your employees happy, healthy, and productive?

Privacy

Do you worry about data security because breaches are expensive and there are fines for releasing confidential information? Or do you truly care about your employees as people and want to protect them and their families?

Licensing

Do you require your staff to have proper qualifications because you don’t want to pay fines or be shut down? Or is it because you want to give your employees the tools they need to succeed and your customers the best service possible?

Safety

Are you checking the OSHA boxes because you’re terrified of the cost of a fine or accident? Or are you genuinely committed to making sure everyone on staff makes it home safely after their shift?

How you view compliance matters

The approach you take to compliance says a lot about the approach you take to running your business and taking care of your employees. If you’ve been looking at compliance as nothing more than a rigid set of rules you have to follow, you’re missing out on a huge opportunity.

Short-sighted businesses view compliance as a necessary tool to control staff and protect the organization. But merely wanting to avoid claims isn’t an inspiring motivator.

Innovative, big-picture organizations see compliance as a natural extension of their business philosophy and strategy.

  • They will find opportunities to align their compliance practices with their purpose, values, and vision.
  • They will look beyond the rules to see why they are important and how they can support the things that matter to their employees.
  • They will associate good compliance practices with good business.

These kinds of organizations will also involve their employees in their compliance processes, giving them a sense of ownership and accountability. Engaged staff members can then become happy advocates and active participants in the creation and implementation of policies that create inclusive, safe, and healthy workplaces.

Some companies will continue to look at compliance as a set of boxes to be checked off, and they will technically be meeting their obligations. On the other hand, businesses that choose to embrace compliance as an opportunity to live out their people-focused values are those that will build the best cultures and attract the best talent.

Why not be one of them?

 

Content provided by Q4iNetwork and partners

Photo by Shopping King Louie