Annual Reviews: the End of an Era

Develop a Respectful & Supportive Work Culture

Annual Reviews can actually be traced back to 221 A.D. when an emperor used it to determine the “performance of the official family members”. Though most give credit to Robert Owen in the early 1800’s, who used it to monitor the performance of his cotton mills in Scotland. Then in 1911 Frederick Taylor used this process to advocate the payment of incentives for individuals, who could increase their output, using an application of scientific management.

From 1918 to 1955 Performance Appraisals were used in manufacturing with blue-collar workers, and this process moved into managerial and professional employees around 1955.

From 1960 – 1970, the Civil Rights Act and passing of Equal Employment Opportunity Guidelines encouraged the Federal Government to create a need for formal company appraisal practices, i.e. the use of Annual Performance Appraisals.

It is believed that now there should be “less focus on past performances, and more focused on career development and developing skills for the future.” (Well Bersin) More of the workforces today are requesting more exchanges and conversations with their supervisors and managers, as more want to learn new skills and talents in order to grow and help their companies to be successful.

One word being used more now than ever is “Culture” – a company’s “work culture” is being viewed by many today as a key factor for a good place to work. Employers are still grasping with how to make this happen. Some offer pizza parties or birthday celebrations for employees, but the employees are looking for something much deeper. They want healthy conversations with their employers and to see those leaders respond or follow through on issues and concerns that employees value. They want employers to “listen” and then to “invest in the workforce”.

Another big difference from the old Annual Reviews is to have those conversations more than once a year – in fact, 2-4 times a year. There are new tools and resources now available for companies. One that Compass Career Management highly recommends is “Performance Culture Systems”. It is web-based, user friendly, customizable, cost-efficient, helps clarify expectations, and can even increase your bottom line.

Companies should give serious thought to eliminating “annual reviews” and look into an effective performance process that is much more effective. With an efficient process you can also identify ways to strengthen those good employees, making them even more of an asset to your business! Check with Compass Career Management Solutions!


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