Stop doing performance reviews? No way!

Stefan Op de Woerd
Stefan Op de Woerd

It’s the latest trend: doing away with the end-of-year performance review. However, many organisations at the forefront of this trend have already backtracked and reinstated their old system. So, look before you leap!

The traditional review cycle is not up to the job...

It’s clear there’s a lot that is wrong with the traditional performance review cycle:

  • Talking about goals and development twice a year does not really do much to help employees be more effective
  • The manager as the appraiser leads to a one-sided view of performance
  • Setting goals for a whole year does not work in the real world where change is a constant

Fortunately, there are all sorts of ways of addressing these shortcomings. Download our e-book for quick ideas to instantly make your performance review cycle more effective.

...but some form of evaluation is still important

That’s not to say we should jettison performance reviews entirely. Just ask your employees. 9 out of 10 employees say they would prefer to have some form of appraisal.


Firstly, because as humans we have a great need to know what others thinks of us. Research has shown that people would prefer to receive negative feedback rather than no feedback at all. Surprising, eh?

Secondly, performance reviews fulfil an important practical role, of linking consequences to performance. They could be negative consequences, such as a poor record in the case of underperformance. Happily though, most of the time, the consequences are positive and you will want to reward employees in the form of a pay rise or bonus.

So, if you are thinking of getting rid of performance reviews, take a moment to consider that you could be going against the wishes of 90% of your staff members.

(It’s worth noting this is one of the 3 most common mistakes when introducing change to your performance management cycle).

Make performance management simple and effective?

Download our e-book “7 steps to transform your Performance Management”

New way of doing performance reviews

Recently, ABN AMRO proudly announced that it was set to abandon its system of annual performance reviews. An article like this instantly aroused our curiosity (as you’d expect! ).

Stop doing performance reviews? How does that work then? But, if you read on you will see that pay rises are in fact determined on the basis of performance. However, they no longer do this in the conventional way.

So, although the title of the article may be a bit misleading, this bank is in fact making big strides towards a more effective performance management cycle. It’s a great example of the new way of doing performance reviews. As part of this process, they have implemented a number of key elements for effective evaluation.

The 3 essential factors for effective evaluation

Every organisation works differently and so needs to design their performance management cycle accordingly. However, there are a number of factors that always feature highly:

  1. Enabling employees to discuss their performance at regular intervals
    Not just once a year, but on an ongoing basis throughout the year. That way you avoid appraisals simply being a snapshot, rather they are the outcome of an ongoing dialogue.
  2. Integrating self-reflection and 360-degree feedback into the evaluation
    Avoid a one-sided judgement that comes from one person only, and get a broader view from a range of people.
  3. Allowing for goals to be adapted and refined throughout the year
    As an organisation, you are looking for employees to be adaptable and to respond to change quickly. So, don’t tie them down with goals and targets that will be in place for a whole year.

Take a look at your performance management cycle – does it do all these things?

Make performance management simple and effective?

Download our e-book “7 steps to transform your Performance Management”

Redefining your performance review cycle

You can redefine your performance review cycle in a host of ways. For example, you need to consider and take decisions on the degree of ownership, the frequency of 1-to-1s and who plays which role in the performance review.

Our free e-book ‘7 steps to an effective performance management cycle’ will help you get started. In it, you will find clear steps to help you design your new performance management cycle – in a way that truly supports your employees to achieve their goals and personal growth.

Jochem Aubel and Stefan Op de Woerd are the founders of Dialog, surprisingly simple software for an effective performance management cycle. Want to know more about how Dialog supports employees and managers to achieve this? Take the product tour.

Read on..