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Lead Your Team Managing

No Annual Reviews? Many Workers Say Not So Fast

No Annual Reviews? Many Workers Say Not So Fast
Credit: Sam 72/Shutterstock

Although annual performance reviews might not motivate employees to improve, workers are split on whether they want to keep these reviews the way they are, new research finds.

Overall, U.S. workers are nearly equally divided on whether they want to keep their annual reviews or replace them with a new system of more regular feedback, according to a study from Eagle Hill Consulting.

Melissa Jezior, president and CEO of Eagle Hill Consulting, said that, while it is trendy for organizations to consider moving away from traditional reviews, the problem lies in what they would do instead. When companies get rid of theannual performance review system, she said, they have to replace it with something, and that something typically takes the form of regular formal and informal feedback sessions.

"This is problematic for companies that lack an open and regular feedback culture," Jezior said in a statement.

Currently, only 55 percent of workers say their manager provides regular informal feedback on their performance.

In general, most employees walk away from traditional performance reviews feeling pretty good. The study revealed that 54 percent of the workers surveyed were pleased with their last performance review discussion, opposed to just 5 percent who left feeling angry and 6 percent who were surprised by the discussion. [Why Negative Performance Reviews Don't Work ... Ever ]

Although they may feel good about their discussion, the vast majority of workers aren't driven by what they hear in their review. Less than 30 percent of those surveyed said their last review motivated them to get better, while 10 percent said their conversation actually demotivated them.

Money appears to be a big reason why many workers are hesitant to do away with annual reviews. The research discovered that 43 percent of employees aren't confident that salaries and bonuses can be fairly determined without a formal annual review.

The belief that reviews provide a good assessment of their performance is another reason employees are wary of getting rid of annual reviews. Specifically, 65 percent of the workers surveyed thought their last annual review was an accurate reflection of their performance.

"Generally, employees feel the system works, and perhaps may worry they won't get feedback needed for career growth or they will not have input on salaries and bonuses," Jezior said.

The results don't mean that organizations should never transition to a new review system, Jezior said. Employers that want to go that route must first do their due diligence in gathering employees' perspectives on the process and be very clear about exactly how performance review information will be used to make financial decisions, she explained.

"It's critically important to engage employees in any change, [and to] be crystal clear about how a new system would work and the impact on promotions and compensation," Jezior said.

The study was based on surveys of 1,617 U.S. professionals across a range of industries and careers.

Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.