Annual performance review is now a thing of the past. Employees are no longer eager to wait for one whole year to get feedbacks from their managers. More and more organizations are now implementing a more robust and real-time performance review and management system. Annual performance reviews are not only tedious but also very time-consuming. It takes some companies a few months of time to properly do year-end performance reviews and appraisals. Also, it is not the ideal method of doing performance assessment. The best alternative is to implement a more frequent kind of feedback system where real-time feedbacks are received and shared on a regular basis.

Many companies are now allowing their managers to make their own decisions when it comes to implementing an employee performance management system. If you are looking for an easier yet more effective way to do the performance evaluation of your workers, you’re at the right place. In this article, you will find about some amazing and proven alternatives to traditional annual performance management.

Problems with the traditional performance appraisal system

According to a study, only less than 20% of managers still believe that the traditional review system works. The rest are moving towards a more frequent and real-time conversation based review system. Many companies have already replaced yearly appraisals with better alternatives. If you are wondering why the traditional yearly review system is not working for today’s managers and employees, there is one simple answer.

The annual appraisal system is no longer sufficient to cope up with the increasing demand of frequent communication and regular feedbacks. The system is usually too time-consuming and complex for managers and employees to follow. Many studies reveal that a poor performance review process can even decrease employee productivity and communication. Employees like to receive regular feedbacks and appreciation on a job well done from their managers. They want to be able to talk and share their views, ideas and make their own decisions. It is also a beneficial alternative for managers. It allows them to keep a real-time track of the employee performance, communicate more frequently, talk about goals and share valuable feedbacks from time to time. Business nowadays is moving too fast for an annual review system. It needs something more reliable and more frequent.

annual performance review alternatives

Alternatives to performance management

So, what is the alternative? How to find a perfect system that can replace the traditional annual performance review plan without creating much disorder? What is the most effective way to evaluate employee performance?

If you are facing the same questions, keep reading to find out the answer.

“People want immediate and meaningful feedback, which is why good managers coach their employees all day, every day, without a formal process or system,” says Roger Ferguson, author of Finally! Performance Assessment That Works. He is not wrong, you know. A good performance assessment system is the one that can keep managers and employees in constant touch, maintaining regular communication, feedbacks, and training. The traits of a modern performance management system are mentioned below.

  1. Regular and frequent feedback system
  2. Use of big data and other technology means for performance assessment
  3. Career development opportunities
  4. Independence to work and make decisions
  5. E-learning tools
  6. More frequent conversations including personal and professional talks

These and some other qualities make a perfect performance assessment system. And that is what we really need.

One alternative to the annual performance review is the Big 5 performance management system recommended by Roger Ferguson. The system focuses on setting up short-term goals and sharing regular feedbacks in meetings. Managers and employees decide five major goals to be achieved before the next meeting. Then, the accomplishments and feedbacks are discussed in the next meeting and new goals are set. The time difference between two meetings can be a week or a month. The idea is to keep people focused on the task to be finished within a deadline. It gives managers a direct way to communicate with their team members, evaluate their performances and share suggestions whenever needed.

An ongoing performance management is another best alternative to the traditional annual appraisals process. Even if you are not ready to implement a completely new performance system, managers can start by conducting ongoing performance feedbacks and conversations with their employees. The idea is to keep the conversation as friendly as possible while evaluating the feedback and issues of the employee. It is also important to provide feedbacks to employees on an ongoing basis.

annual performance review alternatives

Performance coaching and training system can also work wonders when it comes to employee reviews. Managers should be trained with the latest employee management and evaluation techniques so that they can teach the same to their team members. Regular coaching will not only create a boost in the performance but will also remove the communication barrier between employees and managers. Companies must also implement proper learning tools and opportunities to allow employees to grow career-wise.

Another alternative is to modify the existing review system by removing the things that no longer work or replacing them with the better ones. Instead of getting rid of the entire performance system, you can consider rethinking the system. One idea is to define clear goals for each and every employee. Studies show that less than half of employees actually know what they are supposed to do or what is expected of them. By setting proper employee goals and discussing them regularly, you can manage to build a more result-oriented system.

Challenges in the implementation of new performance management

Even if you manage to find a perfect alternative to that traditional annual review system, you cannot expect to completely scrap the old evaluations out of the system, at least not for the first few months. The HR department and even the owners of your company may still ask for annual documentation and progress reports. These reports are mostly useful in the case of a legal claim or dispute. You must have proper records of the employee performance, targets, and appraisals. Therefore, you can only implement the new system step-by-step over a time period of a few weeks, if not months.


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