What Can Replace the Annual Performance Review?

Doing annual performance reviews is always a challenge. I have done more than my share in another life. I considered them not just a chance to look back over the past year but to talk with the colleague about his or her hopes, goals, and dreams for the future. As far as I was concerned, these were opportunities for celebration and discovery as well as evaluation.

In a recent blog Lydia Dishman wrote: “Starting this month, global professional-services firm Accenture will add its name to a growing list of organizations including GE and Deloitte that are ending their annual performance review and ranking systems.” Dishman goes on to describe the short-comings of the performance review process. It was interesting to note that one of the persons she interviewed saw performance appraisal as “a look in the rearview mirror.” Evidently his view of the process was rather limited.

Dishman describes an alternative characterized by “regular feedback,” “productive employee conversations,” and “consistent communication.” To me this sounds a lot like coaching. If someone wants to be an effective leader, he or she should assume a coaching mindset.

A leader who adopts a coaching approach to personnel management is recognizing several things.

First, the people that I lead have a lot of potential. Through coaching, we can find a way to unlock that potential and direct it in a creative way that will benefit both the employee and the organization.

Second, the people that I lead value personal relationship. Very often employees are not looking for extra compensation or plaques but quality time with their supervisor where they are heard and their contributions are respected.

Third, the people that I lead deserve my attention. A coaching leader is not some master who gives his or her servants directions, heads off to the far country, and then returns a year later to see how they have done. The coaching leader is right there providing encouragement, clarification, and feedback on a regular basis.

Fourth, the time I spend with the people I lead makes me a better leader. I can know their abilities, challenges, and successes better when I invest my time in them.

So I agree that annual performance reviews are a thing of the past, but I suggest that coaching others should take their place. Leaders who adopt a coaching approach can make a significant difference in their organizations.

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