As a manager of a high performing team, comprising both junior and senior team members, I am acutely aware of the differing needs and motivations at both ends of the seniority spectrum.

My experience as a manager aligns quite strongly with research, which suggests that the younger members of today’s workforce look for;

  1. Constant, regular and instant feedback on their performance at work.
  2. They are keen to hear feedback not only from their direct manager, but also from other senior members of the team that they aspire to emulate as well as from their direct peers.
  3. They prefer informal interactions over formal, more structured, meetings, especially when discussing their own careers.

All companies need to review the performance of their employees. As the saying goes – “if you can’t measure it then you can’t improve it” – but in light of the above points and based on the fact that the millennial generation is fast becoming the dominant generation in the workforce – why would companies continue to use the traditional annual appraisal process as a way to review employee performance.

The annual performance appraisal process seems to follow the same format across most organisations.Typically it requires each employee to list their main achievements for the year and also to rate themselves in terms of how their actions and behaviours over the year align with the values of the company or with a list of competencies, providing written evidence for their rating.

In some cases the manager will review the content of the form, comment on each achievement and give their own rating for each of the employee’s scores. After that, the manager and employee will typically meet and discuss the content of the form, praising efforts that have turned out well, identifying areas for improvement and creating a set of follow-up actions as the outcome of the meeting.

The process is designed to allow a manager and an employee to formally review the employee’s performance and give feedback on an annual basis. This conflicts with all 3 of my above points and is the reason why over 70% of 25-34 year olds do not like the process.

Employees of all ages feel that the annual performance review;

  1. Is too time consuming.
  2. Has a recency bias – i.e. only recent activities are considered and discussed.
  3. Is not data driven and is quite often manager biased.
  4. Results in issues being discussed too late.

In fact, research shows that employees in organisations which do NOT implement annual performance reviews are actually happier than their counterparts in organisations that do. So, the annual performance review is – well, no longer performing.

Unsurprisingly, several large enterprises, such as Accenture, GE and Adobe have already decided to ditch the annual performance review in favour of other practices. In my opinion, the process really needs to evolve into something, which provides continuous and timely feedback in a relaxed, informal environment and which includes feedback from a number of different people.

Encouraging managers to adopt more of a mentorship and coaching role certainly makes sense too, since it provides the continual feedback that more and more employees look for these days.

The tools that we use for performance and employee management will need to change too, since many of them are geared towards these established ways of doing things. That is one of the interesting challenges we are looking into at Workteam.

Simon Bates is CEO of Workteam, an HR Management System for businesses of all sizes with a focus on growing employee engagement. Visit http://workte.am to find out how it can benefit your organization.