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March 2019
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Reevaluating Employee Evaluations
TD Magazine

Reevaluating Employee Evaluations

Many companies are reconsidering how to handle performance reviews.

It goes without saying that many employees dislike the yearly performance review process—and now companies are responding by overhauling how they evaluate employees. A recent OfficeTeam survey asked 308 HR managers about their companies' performance appraisal processes and found that 51 percent of companies have updated their process within the past two years.

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Of the companies that had recently updated their review process, the top changes made were shortening the process (39 percent of companies) and increasing the frequency of feedback (36 percent). Other changes included adding rating scales (27 percent), adding peer or 360-degree feedback (25 percent), and separating the performance appraisal process from compensation discussions (20 percent).

Many companies are increasing how often they evaluate employees, likely because research has consistently shown that employees—particularly Millennials—crave more frequent feedback. For example, a survey by TriNet and Wakefield Research found that 85 percent of Millennials would feel more confident if they could have more frequent conversations with their managers. Likewise, through their Workforce 2020 study, SuccessFactors and Oxford Economics found that 50 percent of Millennials would like to receive monthly feedback from their managers.

OfficeTeam's research found that evaluating employee performance annually is still common, with 40 percent of respondents saying their company conducts formal performance appraisals once a year. However, some companies are responding to employees' desire for more frequent feedback; 38 percent of organizations conduct appraisals either twice a year or quarterly. A similar OfficeTeam study conducted in 2015 found that only 27 percent of companies hold performance appraisals more than once a year. This 11 percent increase over three years suggests that frequent performance appraisals are becoming more and more common in the workplace.

About the Author

Eliza Blanchard, APTD, is ATD's Learning & Development content manager. Contact her at eblanchard@td.org.

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