During the past few years, changes in organizations occur at an increasingly higher rate, in the context of technology advance that allows the digitization of more and more processes. In these circumstances, the annual performance review can be a block to performance, meaning that employees need now, more than ever, a timely feedback. In this way, their work will be relevant and can be constantly improved.
In the past, the individual performance control was the key to the company performance. Now, in the collaborative work environments, this method can even be counterproductive. In the companies where the review is achieved only at the end of the year, the risk is to generate frustration among employees, because they expect a change after this formality. This change can mean a raise, a promotion, a bonus, and if not, the employees will consider that their work in that year was not appreciated and they will change their attitude, becoming revolted or non-engaged, and all of that may soon turn into a resignation letter.
Furthermore, according to specialized studies, the employees who achieve the best results in annual reviews are usually those who tend to be narcissistic and egocentric and who do not really contribute to the development of the organization.
On the other hand, a constant performance evaluation can help increase motivation and efficiency in the medium and long term, a lower staff turnover and increase revenue per employee.
In Romania, the law says that employees’ evaluation should be mandatory at least once a year, in an organized, standardized manner, that meet the general criteria for evaluation in ROI and documentation, so that the evaluation form to be signed by both parties – employer and employee. On the other hand, in the absence of an accurate methodology, the law leaves it up to each organization to implement such a tool.
Large multinational companies, such as Accenture, Deloitte and General Electric, have started to eliminate the annual evaluation of employees, choosing the alternative of evaluation for each project in real time. Thereby are encouraged unique working experiences that focus on creativity and collaboration. In this way, constant feedback can contribute to a higher rate of success in the following projects and streamlining work processes.
Moreover, it will create an organizational culture where communication plays a central role at all levels and where all employees are motivated to work more effective, gaining advantages throughout the whole year with each occasion in which their work is valued. Thus, their entire activity will gain more coherence and they will understand that a qualitative performance review does not necessarily mean salary increase or promotion.
According to the latest studies in the field, 70% of the global companies are reconsidering their performance management strategy, planning to give up the traditional evaluation systems, for several reasons. First, the working environment has changed almost completely, requiring a more closely collaboration among employees.
Secondly, the need to attract and retain talent, a challenge that may come with multiple efforts that companies need to make, in the context of the increasing globalization. In addition, the advance of technology and the digital economy require a much faster development of the employees, a process that can be delayed by an annual evaluation.
The representatives of these companies say that both their own research and specilised studies have shown that all the time, effort and money invested in these annual evaluation systems have not helped them to achieve the main objective – to improve employees performance.
The studies have also shown that organizations that have decided to eliminate the annual reviews were concerned at first, but excited after seeing the first results. Their employees have become more satisfied, which led to a better engagement at the workplace and a higher performance within their activities.
Therefore, the art of a quality management doesn’t mean only measurements and evaluations among employees, but finding those suitable employees, whom you can give the freedom to innovate.
This can happen only through constant connection between all the organization departments in order to set clear objectives, provide feedback and identify employee expectations about the projects they are working on. Then, rewarding them at the right moment, based on their contributions to the company, becomes a natural thing to do.
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