Employment dispute in Christchurch where a business faced consequences for dismissing an employee before their start date, resulting in an $18.5K payout.
There are two people who don’t like the annual performance review – the person giving the review and the person receiving the review.
The annual performance review is edging closer to extinction and something that is perceived to sometimes do more harm than good. Many of the Fortune 500 companies are ditching the annual performance review process altogether, and are, instead, introducing a more contemporary, organic process of checking in and measuring employees’ performance.
Many companies are now conducting informal check-ups; these can occur monthly, fortnightly or sometimes even weekly. The important thing is that they occur when they need to occur. It does not have to follow a strict annual guideline.
According to Valerie Bolden-Barrett at HR Drive, 94% of employees would prefer their manager to address mistakes and opportunities in real-time.
Senior Reporter from the HuffPost explains in more detail how the dreaded annual performance review inches closer to extinction. Researchers and organisations are saying that these archaic systems send the employees into fight or flight mode once they are told their annual review conversation is due. It also pits workers against each other, as many traditional systems use the ‘stack ranking’ which only allows for a limited number of top performers. This ultimately sees the best people turning against each other. Further, the purpose is to enlighten teams about what they should be doing better or differently, but these systems focus more on past performance, rather than improving future work.
Many organisations are now using a ‘people process’ - or something very similar - which focuses on the employee’s training, development, and succession planning. An important thing to note is that this is not a performance management process. When an employee is underperforming, their performance is addressed through a formal performance management process. These are two independent processes.
There are many ways to carry out this process, and best practise organisations are using various HRIS systems. These are best for larger organisations with a significant headcount. There are also bespoke, fit for purpose solutions that are available. Context is important; we believe that anytime a process is implemented, it should respond to the organisation’s operating context. Additionally, it is important that the position description is up to date and that the people process is in line with their key duties and responsibilities.
No matter what the size of your organisation when a recruit is starting their employment, a trial or probationary period (depending on the headcount) should be in place for the first 3 months. Further, best practise organisations use this opportunity to closely engage with the recruit and schedule catch ups. This is a great way to understand what the employee’s aspirations are within your organisation