Can targeted recognition replace outdated performance reviews?

Performance reviews often present more problems that they resolve. It’s time for a new approach.

The performance review is often used by organisations to deliver feedback to employees usually on whether they’re hitting their targets, happy in their role or in need of any extra support.

However, with it typically taking place just once a year, they are sadly fraught with issues, particularly when it’s the main employee feedback channel used by the company.

Instead, organisations must focus on nurturing a culture of feedback and recognition. Here’s why.

The problem with performance reviews

Performance reviews are typically approached by both employees and managers with uncertainty, trepidation and at times, pure fear.

This is because they normally involve anxiety-inducing and high-stakes conversations that impact the employee’s finances, family and future.

Feedback on how the employee is doing quickly escalates to difficult discussions on whether they deserve a pay rise or bonus.

The meeting can become fraught with awkwardness, especially if the employee isn’t offered either.

And what if they’re deserving of a financial reward but the organisation simply can’t afford to provide one?

When so much pressure and expectation is piled on performance reviews, it’s hardly surprising when employees find them stressful and not constructive.

In fact, Gallup research reveals that only 14% of employees strongly believe that performance reviews inspire them to improve.

An alternative feedback and recognition culture

Organisations need to deprioritise performance reviews, instead focusing on:

Creating a feedback culture in which one-to-ones, team meetings and other feedback channels happen regularly;
Building recognition into the everyday employee experience; and
Providing employees with a mix of financial and non-financial rewards.

By championing employee listening and incorporating regular one-to-ones between managers and employees into the employee experience, this allows constructive two-way conversations.

Feedback isn’t held back until the performance review, but is given in a timely fashion, and any issues can be raised and resolved quickly.

Importantly, recognition for efforts, results and exhibiting the ‘right’ behaviours can be given during the one-to-ones, so the employee feels continually valued and ‘seen’, making the experience positive and enriching.

Recognition should always work in parallel with ongoing feedback so that appreciation becomes the business’s way of life.

Championing recognition

When employees display desirable behaviours, put in extra effort and/or deliver ‘above and beyond’ results, they must be recognised and when appropriate, rewarded.

Recognition must be championed by everyone and to everyone - not just reserved for the top performers - with managers recognising their employees, colleagues recognising their peers, and employees recognising their leaders.

And both small and large efforts must be called out with time put aside to give authentic appreciation in front of colleagues.

By recognising employees for demonstrating desirable behaviours, while ensuring peers and managers witness the recognition moment, a domino effect results.

More employees start to emulate the right behaviours - whether it’s teamwork, innovation or perseverance - and less desirable behaviours become few and far between.

This organically brings about positive changes within the workforce, rather than pointing out to employees what they must alter or improve on!

Finally, rewards must be a combination of financial and non-financial.

While a bonus might be well received at the time, it can lack thought and meaning if given in a transactional fashion.

The best rewards are always those that are personalised, memorable and evoke an emotional reaction.

It could be as simple as a thoughtful handwritten note, gifting an employee their favourite type of chocolate, or providing them with a symbolic award.

Whatever the reward, it must focus on building that sense of belonging, community and connection so that employees feel truly valued and appreciated every single day.

They are then driven to contribute their best.

Is it time to ditch the performance review?

While some organisations may find performance reviews worthwhile, they will only ever prove effective as part of a culture of feedback and recognition in which constant conversations and frequent moments of recognition are prioritised.

Once HR and reward professionals have got the right foundations in place, they must then decide whether performance reviews actually add anything, or are more of an unnecessary distraction.