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Is the annual performance review too delayed to be effective?

22 Jun 2017

Almost two-thirds (63%) of managers in New Zealand would like to ditch the annual performance review in favour of more regular feedback, a survey by recruiting experts Hays has found. In the survey of 164 New Zealand managers, only 37% prefer an annual review.

Instead, most say ongoing regular conversations, preferably monthly, between an employee and their manager are more useful.

These can then be supplemented with a more formal quarterly KPI discussion and an annual salary review and career planning session.

“Most respondents agreed that some form of annual feedback is still important in order to celebrate the year’s successes, but that other more regular feedback must be provided too so that areas for improvement are addressed as they arise,” says Hays New Zealand managing director Jason Walker.

“This allows an employee and employer to change behaviour before it becomes embedded.

“Performance and productivity improve because feedback isn’t held off for the annual review, and managers spend less time managing issues that could have been avoided.”

As one survey respondent says, “We’ve abandoned annual reviews as feedback should be ongoing throughout the year.

“We're not abandoning the focus on performance, just how it is managed and discussed with employees. By making it more timely and ongoing we see performance improvements throughout the year.”

Another notes, “If someone told me I’d performed one thing wrong eight months ago, it (the feedback) wouldn’t be effective and would actually discourage me because it took so long to feed that back.”

Regardless of the feedback process used, Walker says it’s critical that it is transparent, credible and consistent for all staff.

He also says staff must have a voice in the process.

Ditching a formal feedback process altogether, however, is not an option.

Most employers say without it employee performance would decline, their feelings of ownership and accountability would fall, and they’d be given the impression no one cares.

As one respondent says, “Work performance evaluation is critical for managers to feel connected with staff and ensure both their physical and emotional needs are being considered.

“For staff, it is imperative that they feel their supervisor listens to them and takes their feedback on board. Staff need to feel they are being heard at all levels.”

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