91% of managers feel that their traditional performance review process, which happens once a year, is ineffective and does not provide accurate insights. 9 in 10 managers are not satisfied with their company’s employee performance evaluation system because of its obsolete methods.   

Performance review in performance management is the right way to approach to increase the productivity of the employees and also the engagement rate. That implies that your organization should not have just the performance review process but a performance management system, in which the evaluation process is a crucial and mandatory part.   

Why annual performance appraisals are not proactive in identifying skill gaps or fixing the challenges faced by the teams?  

The annual performance appraisal process, as the name suggests, happens only once a year and is treated as a ritual that the employees and managers need to get done with soon. They hate spending hours and hours to complete the process, which includes all the paperwork and intensive thinking to write something that does not offend anyone. In simple terms, the once-a-year performance review meeting is considered a nightmare. In fact, the whole process is abhorred.  

But why is it hated so much? Or why companies move away from their traditional method of evaluating performance when they had it for so many years?  

Reason 1. Change in the Mindset of the Workforce  

The baby boomers were focused more on the pay than the learning and development because of the economy then. Besides, they had strong institutional knowledge combined with talent, and loyalty was one of their strong principles.   

Today, millennials and Gen Z stay where there is learning and professional development along with personal growth. They have a strong entrepreneurial spirit that desires to learn more and implement them in the work. Compensation is important to them but that is not the only factor that they consider before joining a company. They look for an open and transparent culture, growth opportunities, and work-life balance.  

Reason 2. Inability in Identifying the Skill Gap and Performance Issues  

When the performance review happens once a year, there is no chance of a bond or a strong understanding between the managers and the employees. The managers will not be able to identify what their team members are capable of doing. Even if productivity falls, the managers cannot understand the reason behind it or the concern of any employee.  

That is because they do not get too many chances to interact with the employees. Identifying the skill gap is important to know what kind of resources or programs are needed within the team and what kind of work can they do efficiently within the stipulated time and with top quality.  

How to conduct micro performance reviews each month to bridge the performance and productivity gaps?  

Continuous Check-ins  

Instead of reviewing performance annually, providing frequent feedback to the employees builds mutual trust between each other. Conducting one-on-one meetings once a week or twice a month can help build an understanding, and the managers can easily identify the cause if there are productivity gaps. Every team member’s strength will be known to the manager. Also, the managers can interfere and bring things back on track when something/someone in the team starts to fall apart.  

Employees can improve along the way with the feedback they get from their managers. The quality of their work will also be enhanced, which in turn increases the performance of the team double fold. Good leadership, culturally fit employees, and a perfect employee performance management system are required to increase the three Ps of a team. Productivity, performance, and profitability.  

360 Degree Feedback  

360 degree process is a feedback mechanism that helps the employees to learn their strengths and weaknesses. The peers, primary managers, cross-functional managers, and other internal and external stakeholders can take part in the development of an employee through the 360 degree feedback process.   

This process promotes collaboration among the team members and enhances the employee experience. When employees are engaged and aware that their company cherishes them, their performance and productivity will increase.  

Not only employees, but even managers can also learn the gaps in their leadership skills. Research reveals that more than 85% of Fortune 500 companies have made 360 degree feedback as part of their performance management process to create a powerful leadership development process.  

Regular Team Meetings  

Regular team meetings, taking the inputs of employees on goals, and listening to their concerns are vital for an ordinary team to become a high-performing team. One-on-one meetings help individuals but regular team meetings can help managers learn the issues within the team and address them as soon as possible before something damaging happens in terms of performance and productivity.  

These regular team meetings can also help review the competencies and behavioral skills of team members. Instead of trying to know them once-in-a-year, assessing them frequently provides more accurate data to make informed decisions and form data-driven people strategies.   

Effective Performance Management Software  

Doing administrative works manually was one of the reasons why the companies adhered to the annual performance appraisal process. Managers take approximately 17 hours to complete the paper works of a performance review process. And therefore, the micro performance reviews were a luxury that they could not afford. But today, the scenario is different with the advancement in technology.    

Continuous check-ins, one-on-one meetings, performance review meeting summary, and rewards can all be recorded on trailblazing performance management software, which can be referred to later when the performance review process happens. The work has become too easy, and HR and managers can focus on more productive work rather than doing these mundane tasks.   

In a Nutshell  

A robust performance management system and employee performance review process give the strength to the company to weather any storm. If everyone in the company travels in the same direction filled with innovation and transparency, the organization becomes unstoppable. In this day and age, micro performance reviews in the form of continuous check-ins, 360 degree feedback, rewards and recognition plan, and regular team meetings can ensure a seamless and robust performance management process.