Employee Happiness Can be Decreased by Annual Reviews

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Summary: Employee performance reviews may be counter-productive.

- Annual and semi-annual reviews, depending on how they are handled,  can result in employees becoming stressed, which generally makes them less effective.

It is standard practice for many organizations to conduct annual reviews for their employees. However, this approach to managing might not be the best way to help them achieve their goals. In some cases, it appears to potentially make them less effective in their jobs due to a number of factors.

For example, the Globoforce Workforce Mood Tracker a semi-annual survey of  American workers, found that 51% of those surveyed said the reviews are not accurate reflections of their work. If employees are not appraised accurately in their annual reviews, the experience is not likely to make them feel appreciated or respected. Undervaluing employees has been found to decrease their loyalty and increase turnover, which costs companies dearly in lost productivity, recruitment and trainings.

Even going back to 1959, an article in the Harvard Business Review stated there could be some serious problems with annual reviews, 'damaging employees’ senses of self worth, and infecting the workplace with anxiety, dread and resentment.' (Source: TribeHR)

Using annual or even semi-annual reviews means managers and employees are waiting for very long periods between dialogues about meaningful aspects of the job tasks, the work environment and the relationships between managers and employees. Communication is a very important part of making and maintain relationships, and the most significant relationship at work for productivity is the one between bosses and employees.

In his book, The Happiness Advantage, on page 189, Shawn Achor wrote, 'Studies have found  that the  strength of the bond between manager and employee is the prime predictor of both daily productivity and the length of time people stay in their jobs.'

Frequent and consistent dialogues between managers and employees may work better for some organizations. At Zappos, regular discussions were used to replace annual reviews because they worked better to communicate  about the importance of company culture and how well an employee was contributing to it. The culture at Zappos is very much about growth and learning, so it makes sense for communication between employees and managers to be much more frequent than the traditional review approach.

Unfortunately, the manner in which some managers communicate with their employees - for reviews and at other times - can damage employee morale, 'About half of the workers in our surveys report receiving little or no credit, and almost two-thirds say management is much more likely to criticize  them for poor performance than praise them for good work.' (Source: Harvard Business School)

Transitioning away from annual reviews to regular discussions may create a communication style that enhances relationships between managers and employees and allows them to work better together.

Image Credit: John R. Southern, Wiki Commons


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