More and more employers are discovering there are drawbacks to conducting annual performance reviews, which can be stressful, time-consuming and often ineffective in delivering the kind of meaningful feedback that workers can use to improve.

When it comes right down to it, most managers and employees actually dread review time. The process can be tense and awkward, especially:

• When it is used as a dumping ground for a year's worth of beefs and bouquets.
• Or when the employee walks in with a sense of entitlement. No matter what they have or haven't done, they believe they deserve a raise simply for getting through another year.
• Or when a reprimand must be handed down to a subordinate who is fully expecting a glowing appraisal.
• Or when the manager is completely out of touch with the contributions that an employee has made for the past 12 months.
• Or when productive feedback is misinterpreted as harsh or unfair criticism.

If your organization relies only on annual reviews to provide feedback to employees, it may be time to re-evaluate your internal communication strategy. To be effective, performance feedback needs to be provided often and objectively without disrupting day-to-day business -- in other words, not during one nerve-wracking hour every 52 weeks.

Instead, employee feedback should be provided regularly as part of the workplace culture.

It should be considered a way to build lasting relationships with workers, empowering them to carry out their responsibilities and motivating them to see and contribute to the "big picture."

Here are some tips to help you turn annual reviews into continuous feedback:

Good feedback can be instant and informal. Give praise often and loudly to employees whenever an opportunity presents itself. Did someone make an exceptional effort with a customer or in facilitating a meeting with suppliers? Did they go beyond the call of duty to make you and the rest of the company look good? Be sure to say so.

Anytime is a good time to steer them back on track. If there is an interpersonal conflict than needs to be resolved or you have an employee who is not meeting expectations, schedule a one-to-one meeting. It is important to discuss the behaviour and find solutions before it is too late or seriously affects the productivity of others.

Who says bonuses are only annual rewards? Instead of giving out bonuses based on the calendar, try giving out acknowledgement rewards (money, time off, gift certificates) all year around. Create a recognition program to catch employees doing something good, meeting set goals or achieving a brand new level of performance. By rewarding people when they deserve it instead of when it is expected, you can reinforce good behaviour and help create a culture of engagement.

Do away with the old employee file by evaluating electronically. Employers can ease the pressure of scrambling to collect data for annual reviews by automating the process. Invest in a software program that will prompt you to provide performance goals and track individual progress during the year. This will also allow you to develop rating tools for compensation decisions and to schedule professional development training -- in addition to having an up-to-date employee record at your fingertips.

While employee progress needs to be addressed all year round through positive feedback and necessary coaching, there is still a place for the formal annual review.

Such a meeting should help employees clarify expectations and collect constructive feedback while helping employers to stay in touch with their people and align the goals of every department with the goals of the organization.

Once both parties agree to its purpose, the evaluation can become a valuable part of a perennial, not annual, performance review process.

-- With reporting by Barbara Chabai

John McFerran, PhD, CMC, F. CHRP, is founder and president of People First HR Services Ltd. For more information, visit www.peoplefirsthr.com.

RESEARCH:

http://management.monster.ca/9031_en-CA_p1.asp

http://www.microsoft.com/smallbusiness/resources/management/employee-relations/turn-annual-reviews-into-continuous-feedback.aspx#Turnannualreviewsintocontinuousfeedback

http://www.businessweek.com/careers/managementiq/archives/2009/08/will_ending_ann.html

Republished from the Winnipeg Free Press print edition November 28, 2009