Companies are retaining the annual performance review process; still, employees need to know how to participate.
For years, analysts have been touting the end of the annual performance review, saying the process is disconnected from day-to-day work and unnecessarily time-consuming. While those complaints may be legitimate, new research from XpertHR finds that employers aren't planning to do away with formal annual performance reviews anytime soon.
To get a clear picture of the review process's current state, XpertHR surveyed 344 organizations, representing nearly 772,000 employees. Unsurprisingly, a majority of respondents said they conduct reviews once a year. Far fewer companies said they conduct their reviews twice a year or quarterly.
"The results show that while there is talk of the demise of the annual performance review, it is still by far the most common frequency of performance appraisal," says XpertHR surveys editor Andrew Hellwege.
According to Performance Appraisals 2021, at least seven in 10 organizations use general competency reviews to measure quality of work, timeliness, and other aspects. Meanwhile, just over half of the respondents said they use ratings or grades to measure performance. Among those, 55 percent opt for a five-point scale.
Another 47 percent said they use objectives-based reviews, with the majority of them indicating that employees and their managers collaboratively establish objectives.
Researchers also asked respondents to clarify who provides feedback during the appraisal process. Virtually all responding organizations indicated that employees' managers do so.
"The survey shows that organizations are split about whether to include the reviewee's input during the appraisal," notes Hellwege, with just under half of employers allowing workers to provide their own feedback, such as via self-assessments. Even less common was obtaining feedback from colleagues, clients and customers who interact with the employee, and the employee's direct reports.
Beyond the various ways companies are handling performance reviews, the survey uncovered that most employers are not providing adequate training to ensure all staff know how to complete the performance appraisal. Only slightly more than one-third of employers provide that training for both nonmanagers and managers, one-third provide it only for managers, and one-quarter do not offer training to any employees.
Hellwege states that based on those findings, organizations—and by extension talent development professionals—may want to review the training they offer and ensure that all staff are well prepared for annual reviews.