Annual Performance Reviews Are Dreadfully Outdated
In this modern career age, annual reviews are increasing becoming outdated. Employees are far more likely to work shorter term jobs, while that might boost their salary, it’s also detrimental to both themselves and their employers.
Too often, a new employee will join a team and will quickly learn the new skill set required for the job. Before long, the employee is marketable and is approached by recruiters or other companies in the industry, who come with offers significantly higher than the employees current wage. The employee is enticed by the offer of a higher wage, their current employer is unprepared to provide a counter offer either because they can’t afford it or by this stage they are likely to leave soon regardless, and the employee moves on to their new employer. And thus the cycle starts again, and this process usually takes less than a year to play out.
While this is beneficial for the employees bank balance, it’s unfair on both the employee and their employers. It leaves employees in an unstable position, where they are spending considerable amounts of time on a probationary period and could be left without an income at the drop of a hat. It also means they have little to no leave accrued when they are confronted with illness or other personal issues that force them to take significant time off. I should know, I have run into both situations this year alone. It is also unfair on employers, as it is expensive to train new team members constantly and it can be quite disruptive to the efficiency of the team.
Considering how fast the technology industry is evolving, it’s only natural that the way businesses run evolves to keep pace. With a number of websites available where potential candidates can be contacted with ease such as Seek or LinkedIn, employees are going to receive an increasing amount of competing job offers. It’s high time employers adapted to the evolution of the industry and do away with annual performance reviews, and undertake reviews every 3-6 months.
Employees need to know their value to their employer. No-one wants to feel undervalued or unappreciated. By increasing the frequency of performance reviews and subsequent pay raises, this provides an ongoing demonstration of the employees worth to the business and provides a stable bank of leave entitlements. For the employer, it allows them to save time and money on training new staff and provides stability to the team allowing them to produce consistent quality output. A high performing business should be experiencing enough growth to be training new staff regularly without having to replace their quality talent that slipped through their grasp.
In this fast paced industrial age, businesses can’t afford to rest on their laurels and regularly let good talent walk out their doors because they aren’t prepared to offer more frequent pay and performance reviews. Annual reviews might be a tradition of business, but can they afford not to become more proactive about retaining their top talent?