I originally started this post with the aim of helping you prepare for your annual review.

But as I began to write, I got the urge to tell you why I think your annual review and associated rankings should be scrapped.

So here goes –

My top 10 reasons

  1. It creates a culture of I rather than we. When I led the transformation of a global development team to agile, the number one question was how do I stand out if I am just a team member. The focus should of been how do I help my team get better and deliver more value to our clients.
  2. Some managers will only give feedback at mid year and year end. This creates surprise when an employee hears the feedback for this first time and is not given time to correct.
  3. It demotivates over 50% of the employees who get ranked as average or below in the pre-historic performance bell curve. They spend the next month feeling unappreciated and deciding whether to leave the company rather than on the work that needs doing.
  4. It creates a higher level of voluntary attrition in the new year, usually of the people the company wants to keep. The cost and time spent finding and training replacements is a big waste.
  5. The artefact is a single written document that is generally only read again at the next annual review or during grievances. It takes managers and HR many late working hours to write up and validate these documents.
  6. It creates an unhealthy and unproductive work life balance. Many employees believe that working long hours relates to a good performance ranking.
  7. Is causes stress and anxiety. This again causes a loss in productivity before the review itself.
  8. It should be about you and not about how you rank against your counterpart.
  9. It creates a culture of not making mistakes which stifles innovation and growth. How are people meant to grow if they do not learn from making mistakes.
  10. Encourages peers to back-stab and thus creates a blame culture.

What is the alternative

Do not get me wrong, I strongly believe in feedback, but I believe it should be regular and at the time of observation.

Peers and others should also give feedback without the fear of backlash.

Managers should be acting as coaches and growing their team through constant observation and feedback.

Compensation aligned with teams creating value and not individual ranking. At the end of the day, you are working for a business whose clients reward it by receiving value.

Top trendsetters

Adobe

In 2012, Adobe abolished its annual review system in favour of ongoing check-ins. Voluntary attrition has decreased substantially and eliminated 80,000 hours off administration.

General Electric

GE moved away from their annual performance process for 300,000 employees. It now uses an app they designed called PD@GE (Performance Development at GE).

Rather than hearing how they’re doing just once a year, employees have access to what the company calls “insight”. They see the feedback whenever they want to see it – and even if they don’t.

The feedback comes from peers and managers and focusses on frequent discussion on short-term goals.

Accenture

In September 2015,  Accenture scrapped its annual annual review and rankings for a more fluid system. Employees now receive timely feedback from their managers on an ongoing basis following assignments.

Others

Microsoft, Gap, Deloitte have also reformed their annual review process.

I am sure we will see others in the near future.

Wrap up

As you can see some companies are moving away from their annual review and rankings process for some of the reasons I mention above.

My blog is to help IT professionals in their careers and I understand that a large majority of you do not work for these trend setting companies.

If you would like me to still write my original post on how to prepare for your annual review, let me know in the comments below.

If you agree or disagree with the above, also let me know below and maybe we can create enough traction to influence a transformation.

References

Categories: Resources

2 Comments

Sohail · November 6, 2015 at 9:49 pm

Hi Nick,

Brilliant article. However, it would still be great if you can write your original article on how to prepare for an upcoming annual review. I’m sure that it would definitely help me in preparing mine for this year.

Thanks and happy writing.

Sohail Khurshid
Developer – Advanced Utility Systems, Toronto Canada.

    Nick Foster · November 7, 2015 at 12:40 pm

    Thanks Sohail, I will kick out the post for preparing for your annual review next week.

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