What’s Wrong With Annual Reviews And What To Do Instead (GTD Tuesday)

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Recently I heard a podcast that offered a great alternative to annual performance reviews. It seems that most companies do annual reviews but most people agree that they aren’t very effective.

The podcast was an episode of The Cranky Middle Manager featuring David Maister, author of Strategy and the Fat Smoker; Doing What’s Obvious But Not Easy. At around 13 ½ minutes into the show, Maister addresses the issue of performance reviews. To summarize his thoughts:

The problem. Annual performance reviews address multiple
topics, long after the events have taken place, with the pressure of
raises and bonuses involved.

The solution. Give performance feedback one topic at a time, right when it happens, when it has nothing to do with pay.

Easy to talk about but hard to do. On the other hand, I believe
those who implement this method will reap great rewards in terms of
increased productivity and loyalty.

What are your thoughts? Are annual performance reviews good? Bad? What are other alternatives?

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