August 8, 2016

The Annual Performance Review is Dead

The case to get rid of annual performance reviews is overwhelming. Run a quick search on annual performance reviews and you are likely to find supporting stats, more stats, opinions, editorials, and a bunch of four-letter words. Mention annual performance reviews at work and see your colleagues roll their eyes.   

It’s true. You want data?

  • 95 percent of employees surveyed in the marketplace said they hate their company’s annual review process
  • 90 percent of HR heads believe annual reviews do not yield accurate information
  • 58 percent of executives believe their current performance process does not drive employee success and performance and is not an effective use of anyone’s time

Even General Electric, which basically invented the annual ratings driven performance management system, has recently scrapped its archaic process.

Here at Endurance, we surveyed our employees and guess what happened? Only 8 percent of our employee base thought annual performance reviews were effective. (Gulp!) So, yes, we changed too! 

As the great Bob Dylan once said, “The times they are a-changin'."  

Axing the traditional review process? Here’s what to do instead:


Focus on frequent and consistent conversations that will help correct and support the behaviors you want to see from your team and in the workplace.

Theoretically, performance management should happen every day.

This isn’t a hard concept to grasp. Think about it this way: In sports when a coach observes a player doing something wrong that could affect his or her performance and more importantly, impact the outcome of the game, does the coach wait until after the game is over to coach the player? I don’t think Belichick and Brady won four super bowls together following that plan.

In the tech industry, innovation drives change in markets, products, and services every day. Information happens in real time. More than ever, employees need to know where they stand and what is expected of them. Confirmation, coaching, encouragement, and empowerment are critical success factors in driving employee engagement and company performance. Waiting for some annual process to share this information with (or reward) the employee is crippling the employee, the company, and you.  


To be legitimately effective, performance management not only requires frequency, but transparency and accountability as well. Make it a two-way conversation. 

Employee and manager conversations belong to the employee! The best performance review systems and processes create the platform for the employee to provide feedback to their manager. Carve out time for the employee to give you feedback. 

Part of your responsibility as a manager and leader is to eliminate roadblocks and obstacles for our employees. Invest the time in learning what those obstacles are and overall what you can do to help. At Endurance, we coach our leaders to ask the question, “Do you have any feedback for me?”


Finally, when you change up your performance management philosophy, make sure you stay with and improve it. This isn’t “set it and forget it” — nothing happens without work. 

Managers and leaders need to be trained and coached, and trained and coached again as the organization evolves. The messaging and communications of its importance also needs to be maintained and consistent. Any good program is closely managed.


Marcus Tgettis is the Vice President of Global Talent at Endurance International Group. Follow him on Twitter: @marcustgettis

Image via Shutterstock






Our current openings