Our summary: Annual performance reviews have a reputation of being ‘useless’ and ‘unnecessary’ – but almost all companies still use them. This is because when done right, performance management increases employee engagement, lowers retention costs and encourages successful staff development. It also pushes managers to be better at their jobs. The article also notes the growing relevance of new technology in HR management, particularly web-based systems, while emphasizing the importance of bespoke appraisal methods.

FairSetup thoughts: By encouraging more regular performance evaluations, FairSetup helps companies improve their culture while promoting fruitful communication between employees and managers. This is an alternative approach to traditional performance management, as it sets up regular feedback loops and collects data over time, ensuring that no employee contribution is lost. This makes the retention process more cost-effective, and increases employee satisfaction.

By GABRIELLA JOZWIAK
Published: October 22, 2012

A recent US poll of 2,677 people (1,800 employees, 645 HR managers, and 232 CEOs) by San Francisco-based rewards-and-recognition consulting firm Achievers revealed 98% of staff find annual performance reviews unnecessary. Remember – among the 2,677 respondents, a quarter were HR professionals.

Edward Lawler, professor of business at University of Southern California, reacted by declaring: “Performance appraisals are dead.” But he also unveiled research showing 93% of companies use annual appraisals, and only 6% have considered dropping them.

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