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People + Culture

Performance reviews: Are they still relevant?

While managers approach the meeting believing it’s the right thing to do, we’ve heard employees refer to the formality as forced or awkward.

In most organisations and at least once per year, managers are required to conduct a performance review. While managers approach the meeting believing it’s the right thing to do, we’ve heard employees refer to the formality as forced or awkward. So, it begs the question: are performance reviews still relevant?

Here we cover:

  • What is the purpose of a performance review?
  • Are performance reviews necessary?

What is a performance review?

A performance review is a scheduled meeting where a manager evaluates an employee’s work performance. This manager may assess whether the employee:

  • Has achieved their yearly goals.
  • Is developing in their role.
  • Is fulfilling the responsibilities of their role.
  • Communicates well with their team.

A performance review is intended to promote communication and provide helpful feedback. It’s also a process that ensures there’s a record of any conversations where feedback is given, and actions need to be taken.

One of a manager’s key responsibilities is to provide continuous and constructive feedback to their employees. Having a formal occasion set in the calendar ensures that these conversations take place.

For an employee, this is a chance to share any grievances or new goals as well as listen to feedback, make any corrections if needed, or request more support.

With regular performance reviews, both employees and managers will know how the other feels about their work, their position, and their team.

Managers discuss their approach to performance reviews

Are performance reviews necessary?

According to a study by Gallup, only 14 per cent of surveyed employees strongly agreed that performance reviews inspired them to improve. And — in the US, a few notable organisations have removed performance reviews entirely including Accenture, Deloitte and Microsoft.

So, what are the issues and are performance reviews necessary?

  1. Performance reviews occur infrequently

If you’re waiting for a full 12 months between reviews, lots of the details will be lost. It’s likely anything discussed in the performance review will focus on more recent projects that are top of mind. That means any valuable insights from projects 11 or 10 months won’t be discussed or you’ll do so far removed from the actual successes or issues of the project. What you discuss, will then be quite limited and undermine the purpose of a performance review.

To solve this issue, performance reviews (or stay interviews) could be provided on a more frequent basis, such as quarterly. If your business is project-based, it’s an even better idea to hold these reviews after the completion of work.

Teammates work through performance reviews

  1. Performance reviews are held by one person (and one opinion)

Performance reviews are in a one-on-one format. This means any feedback is coming from one person and may only include their opinion.

In a business, employees generally work with many people, not just their manager. If the manager does not talk to their colleagues to gather information on how they work, their successes or any issues, the review will be quite limited.

If the manager does ask for team feedback before the review, it’s also important the manager is objective and can recognise biases when collecting this information. This also extends to the manager themselves, as they will need to be aware of any biases they might have which would colour the performance review.

To ensure the performance review is well-rounded and fruitful, managers must be well-trained in objectivity and bias.

  1. Performance reviews do not value innovation

The format of a performance review is usually quite formulaic and is focused on success. This means that attributes that fall outside of traditional markers of success—like innovation, teachability or resilience—may not be recognised or rewarded.

Managers should be aware of exceptional employees who exceed in other ways and ensure they are praised appropriately. Performance reviews may need to be personalised for every business or stream within the business to truly recognise the contributions of all the people in their organisation.


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