Most companies—large and small—use the ubiquitous annual performance review as an X-Ray into employee work accomplishments for the year. These often feared face-offs with the employee’s boss usually consist of an hour re-hash of what the employee accomplished or didn’t accomplish during the year. In the end, the manager “awards” the employee with a number—usually between 1–5—that translates into the year’s salary increase, or raise (in percentage). Although companies try hard to separate the accomplishment conversation from “how much is my raise going to be,” discussion, it usually doesn’t happen.
But according to an article in Fast Company, “Lately, there’s been a bit of a quiet revolution going on in the world of evaluating employee performance. A variety of innovative companies are reformulating the standard review while others are ditching it altogether.”
The CEO of Accenture, Pierre Nanterme, says the new generation of workers—millennials—want to hear how they are doing on an ongoing basis. “Am I doing right? Am I moving in the right direction? Do you think I’m progressing?” Nanterme says, “Nobody’s going to wait for an annual cycle to get that feedback.”
In a recent study, researchers discovered what millennials value most from employers:
- Training and development
- Flexible hours
- Cash bonuses
The company, Buffer, eschews annual performance reviews for ongoing weekly feedback through one-on-one sessions.
The EOS Approach to Performance Reviews: The 5-5-5
Businesses that have adopted the Entrepreneurial Operating System use an innovative tool called the 5-5-5. The tool encourages managers to meet quarterly with employees for a casual conversation about how the individual is doing. The conversation doesn’t require reports, paper or write up. Together, they focus the discussion on the person’s predefined five roles, five core values (how well the person fits the company’s core values), and 5 rocks (how well he/she is doing on the most important priorities in the quarter).
The 5-5-5 keeps the manager and employee connected smartly about the most important aspects of the employee’s work and allows for productive and regular conversations. If it happens regularly (doesn’t need to be quarterly, but this is about the right amount of time in most cases), then an annual review is most likely not needed. You can download the 5-5-5 tool from the EOS Worldwide website.
Download a Free Chapter of How To Be A Great Boss
What if your employees brought their A-game to work every day? Often, the difference between a group of indifferent employees and a fully engaged team comes down to one simple thing: a great boss. Download a free chapter of How To Be A Great Boss.