This was in 2002, during his tenure as the drugmaker’s head of global human resources. When Brian Jensen told his audience of HR executives that Colorcon wasn’t bothering with annual reviews anymore, they were appalled. Some firms that have struggled to go entirely without ratings are trying a “third way”: assigning multiple ratings several times a year to encourage employees’ growth. This shift isn’t just a fad-real business needs are driving it. To better support employee development, many organizations are dropping or radically changing their annual review systems in favor of giving people less formal, more frequent feedback that follows the natural cycle of work. That can hinder long-term competitiveness.

Other firms are trying hybrid approaches-for example, giving employees performance ratings on multiple dimensions, coupled with regular development feedback.īy emphasizing individual accountability for past results, traditional appraisals give short shrift to improving current performance and developing talent for the future. Some companies worry that going numberless may make it harder to align individual and organizational goals, award merit raises, identify poor performers, and counter claims of discrimination-though traditional appraisals haven’t solved those problems, either. (3) Prioritizing improvement over accountability promotes teamwork. (2) The rapidly changing business environment requires agility, which argues for regular check-ins with employees. The authors explain how performance management has evolved over the decades and why current thinking has shifted: (1) Today’s tight labor market creates pressure to keep employees happy and groom them for advancement.

That’s why many organizations are moving to more-frequent, development-focused conversations between managers and employees. The annual review’s biggest limitation, the authors argue, is its emphasis on holding employees accountable for what they did last year, at the expense of improving performance now and in the future. Hated by bosses and subordinates alike, traditional performance appraisals have been abandoned by more than a third of U.S.

Far manager clear history