Are Annual Performance Reviews a Thing of the Past?
With a high demand for critical skills, especially in highly technical fields such as engineering, manufacturing, gas and oil, as well as electronics and software development, many companies are enlisting the help of staffing solutions providers to help them find qualified candidates to meet their specialized labor needs. In fact, a study conducted by Oxford Economics, Workforce@2020, found that 83 percent of executives polled have increased their reliance on contract employees and plan to maintain this practice into the future.
The rise of variable contract work has created a need for more project-based performance appraisals. Many business leaders today agree that the classic annual review doesn’t really get it done anymore. Instead, companies are opting for more open environments with consistent feedback.
“In a [recent] survey more than half the executives questioned (58 percent) believe that their current performance management approach drives neither employee engagement nor high performance,” report Marcus Buckingham and Ashley Goodall in the Harvard Business Review. “They, and we, are in need of something nimbler, real-time and more individualized — something squarely focused on fueling performance in the future rather than assessing it in the past.”
In recent years, corporations such as Microsoft, G.E., The Gap and Accenture also made news for overhauling their review processes. Accenture, for example, says it will drop its ranking system and phase out the annual evaluation process beginning in 2016. “It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments,” reports The Washington Post.
After all, it is hard to manage what you can’t measure. Adopting tools for managers to enter performance information in real time and in a way that helps rather than hinders employees’ morale will be essential for companies looking to improve employee culture and productivity in the future.