The End

of Performance
Reviews
The Ultimate Guide To End The Legacy Annual
Performance Reviews

2018
 Contents
2 Introduction
A Changing Workforce

6 Step 1: Understand the

Elements of Ongoing
Performance Management
1. Effective Goals Management
2. Ongoing Coaching
3. Development Planning
4. Praise & Recognition

10 Step 2: Use A Test Group

Choose Your Group
Select an Option
1. Formal Reviews
2. Quarterly Check-Ins

14 Step 3: Rolling Out & Training

Establish Executive Buy-In
Train Managers

17 Get Rid of the Annual Review

20 Conclusion

23 About Atiim

page 01
Introduction
Introduction

Annual appraisals are increasingly on their way out, leaving in their wake a
need for a more agile solution to performance management. From GE to
Deloitte, leading companies are finding that the formal yearly review is
problematic for a number of reasons:

• “Rank and yank” appraisals popularized by companies like GE focus too

heavily on past issues instead of encouraging improved performance
moving forward

• Managers and employees dislike the formal process, as it generates

little useful feedback, and as The Washington Post put it, “everyone
hates performance reviews”

• Even high-performing employees tend to focus more on critical (instead

of positive) feedback received in yearly reviews

• Yearly reviews are skewed by manager biases and are thus not as
objetive as they should be

• It’s extremely costly: Deloitte found that they were spending close to 2
million hours per year on annual reviews. Considering that the average
manager makes roughly $80,000 per year, the amount of money spent
on annual reviews is exorbitant.

To compound everything described here, consider the most important fact

of all: annual reviews simply don’t work. They fail to execute on the one
thing they’re designed to do, which is to develop employees for continuous-
ly improving performance.

page 03
Introduction

Both managers and employees agree that the annual review isn’t working.
In one survey reported by the Society for Human Resource Management
(SHRM), 95% of managers said that they were dissatisfied with their
company’s performance management process. Moreover, 66% of employ-
ees said that the annual review was disruptive to their productivity, and
66% said it was irrelevant to their jobs.

A Changing Workforce
Beyond the factors mentioned above, a changing workforce is also creat-
ing a need for a more continuous performance management framework.
While the yearly review may have worked during its infancy, it’s no longer
appropriate for today’s changing business landscape. Consider the follow-
ing:

Millennials are currently the largest age group in the workforce. Accord-
ing to a PwC NextGen study, 41% of Millennial employees want to be recog-
nized for their work on a basis of at least 1x per month. The yearly review
doesn’t provide the clarity of expectations, ongoing feedback, and
course-correcting guidance that the biggest portion of your workforce
wants and needs.

In addition to that, more and more organizations are relying on contractors

and freelancers, and are allowing associates to work remotely. By 2020,
freelancers will make up 40% of the workforce. To ace performance man-
agement for distributed teams, one yearly review isn’t going to cut it.

page 04
Introduction

Clearly, there’s a distinct need for a performance management system that

adapts to your changing organizational objectives and effectively drives
performance by developing a consistent feedback loop among managers
and employees. Only then can you provide your workforce with the
feedback they critically need to improve performance.

In this guide, we’ll discuss the benefits of replacing annual reviews with a
more agile approach to performance management. We’ll also describe
ways you can begin implementing an ongoing feedback loop in your orga-
nization to begin experiencing accelerated results right away.

page 05
 Step 1:
Understand the
Elements of
Ongoing
Performance
Management
Step 1: Understand the Elements
of Ongoing Performance
Management

The first step in moving away from the annual review process is to under-
stand what your new performance management system will encompass.
Ongoing, real-time feedback exchanged between managers and their asso-
ciates is one aspect, but in order for that to be successful, you must also
have effective goals management and development strategies in place.

Here are the four main pillars of a strong performance management frame-
work:

1. Effective Goals Management:

This includes collaborative goal setting among managers and

associates, active goals tracking through the help of a tool such as
goals management SaaS, and revision of goals to reflect changes in
company objectives. Many companies have begun using Objectives and
Key Results (OKRs) as a means of effectively structuring, measuring,
and tracking aligned goals on the company, team, and employee level.
In fact, this is the very goal setting framework Google has used for
years.

2. Ongoing Coaching:

Effective coaching will be supported significantly by your ability to

maintain an ongoing feedback loop among managers and associates.
Managers should offer guidance as needed, checking in regularly but
allowing associates to have the autonomy to execute their own goals
independently. When course-correction is needed, managers should
step in promptly. All ongoing coaching should be done in a timely
manner to optimize results.

page 07
Step 1: Understand the Elements
of Ongoing Performance
Management

3. Development Planning:

Instead of discussing development planning only once per year in a

formal setting, managers and employees must discuss plans and
desires for the future openly during check-ins. Managers should aim
to collaborate with employees in constructing development plans that
leverage their strengths, and through regular, ongoing feedback,
employees can discuss which opportunities they’re interested in for
the future.

4. Praise & Recognition:

Another component that depends on ongoing feedback, praise is

essential for keeping employees engaged and laser-focused on
completing objectives. By acknowledging associates’ recent wins
(big or small), managers effectively communicate that their
contributions matter to the success of the organization overall.

The key to transitioning to an ongoing, real-time feedback model is simply

encouraging managers to have timely, relevant discussions with their
teams often. Ultimately, managers should be tracking performance and
using a solution such as a pulse survey to stay in communication with
employees one time per week. They should also have weekly one-on-one
meetings to discuss what the associate has completed that week, what
needs to be completed by the following check-in, and whether any assis-
tance or intervention is needed by the manager.

page 08
Step 1: Understand the Elements
of Ongoing Performance
Management

Having managers check-in with associates may seem like it would be

time-consuming, but with support from performance management SaaS,
check-ins can be brief and focused exclusively on the high-priority items
that need to be addressed by both parties. Additionally, you’ll wind up
saving a significant amount of time in the long run. Instead of spending
weeks prepping for a single annual review, managers will exchange brief,
engaging performance-related discussions regularly.

page 09
 Step 2:
Use A Test
Group
Step 2: Use A Test Group

If you’re part of a larger company, it’s recommended that you first start with
a test group instead of trying to implement an ongoing feedback frame-
work all at once. Here’s how.

Choose Your Group

Be sure to select a group that has been receptive to change in the past, and
also make sure that the designated test-group managers fully support the
initiative as well. Provide training on the pillars of performance manage-
ment discussed in the previous section, and encourage managers to offer
positive feedback about 3x as often as they criticize. If you’re using perfor-
mance management SaaS to support your feedback exchange, give partic-
ipants a tutorial of the software.

Most importantly, allow managers to develop their own rhythm. The goal of
real-time, ongoing feedback is to coach employees directly after they’ve
achieved a win or shown a need for guidance. It’s also meant to improve
their performance for the future. Thus, it needs to be done on a continuous
basis. Remind managers that it’s not a “one and done” activity; rather, it’s a
frequent exchange.

page 11
Step 2: Use A Test Group

Select an Option
To phase out annual reviews first in your test group, you have two options:
continuing to use some type of formal review based on the feedback
exchanged regularly, or switching over to quarterly check-ins.

1. Formal Reviews:

To start, you’ll initiate ongoing, real-time feedback in your test group as

described above. After about 1-2 quarters, you can gather the results of
the trial period and share them with your executive board, supervisors,
and other key stakeholders to gather support. You can then begin rolling
out real-time feedback system, including any goals and performance
management software, to the rest of the organization.

When it comes time for the yearly appraisal, you can still hold a review.
Some companies prefer this as a means of keeping record of formal
performance appraisals for compliance purposes. Nonethless, it will be
much different from the way you used to conduct reviews, because
there will be no surprises between managers and associates. Instead,
it will simply be a comprehensive review of goals that have been
achieved and what’s next for the employee.

page 12
Step 2: Use A Test Group

2. Quarterly Check-Ins:

Alternatively, you can follow the same method in the previous step,
but instead of sticking with formal annual reviews, you can opt for
quarterly check-ins between managers and associates. Again, start by
using a pilot group for real-time feedback, performing check-ins for 2
quarters. Present your findings to key associates, then roll out to the
system to the rest of the company.

page 13
 Step 3:
Rolling Out
& Training
Step 3: Rolling Out & Training

After you’ve completed your trial period of ongoing, real-time feedback with
your test group, there are a few critical transition steps to take. Ensuring a
smooth transition now will facilitate overall success throughout the organi-
zation and garner support from the company as a whole. Here, we’ll go
through the step-by-step process of having a successful roll out of ongo-
ing, real-time feedback.

Establish Executive Buy-In

There are a few tactics you can use to lock in support from executives. For
one thing, implementing a SaaS solution that’s easy to use yet agile and
powerful will gather more approval from key stakeholders than a complex,
cumbersome type of software.

Additionally, executives like to see data. When presenting the positive

findings from your trial period, be sure to incorporate statistics wherever
possible. For instance, if you use pulse surveys regularly to gather employ-
ee data, you’ll certainly want to report any uptick in engagement levels,
morale, performance, and any other key findings that developed as a result
of the ongoing, real-time feedback exchange trial.

You can also present findings gathered via your goals management
software. For instance, if you rolled out the feedback trial with your sales
team and they achieved more sales or generated more leads than in past
quarters, that’s something you’ll want to present to executives which will
demonstrate the proven potential of ongoing, real-time feedback for driving
business outcomes.

page 15
Step 3: Rolling Out & Training

Train Managers
Your managers are already busy. Asking them to start providing real-time
feedback to each of their associates on an ongoing basis without any tools
would be impossible. That’s where real-time goals software and pulse
surveys come in. Together, they can cultivate an ongoing feedback
exchange by keeping goals progress organized through metrics, and allow-
ing managers and employees to offer support and suggestions as needed.
The best tools have communication channels through which managers
can give employees feedback right then and there, so that providing and
accessing valuable input is extremely convenient for both parties.

Then, during weekly check-ins, managers can simply go over the most
critical points with their team to discuss progress, clarify expectations, and
explain what needs to be done by the next one-on-one meeting. If the asso-
ciate needs any guidance from their manager, they can discuss it at this
point. Everyone is clear on expectations, aligned with company objectives,
and laser-focused on goals.

page 16
 Step 4:
Get Rid of
the Annual
Review
Step 4: Get Rid of the
Annual Review

In time, your employees, managers, and executives will begin to see that
real-time feedback offers advantages such as a better understanding of
what bonuses and salaries are based on, an ability to offer and receive
ongoing coaching, and an overall increased level of trust and transparency
throughout the organization. They also lead to enhanced development and
accuracy.

Although, it is possible that your company may not be fully prepared to

ditch the formal review process – yet. It could be that your company
culture isn’t quite ready to rely on feedback and check-ins alone to gauge
performance. If that’s the case, you can continue using a formal review
alongside ongoing, real-time feedback as described earlier.

However, if you are going to still hold some type of review, it’s best done on
a quarterly or even six-month schedule versus the annual review. Keep in
mind the following points:

• The world does not operate on an annual schedule for anything

anymore

• Annual reviews can be time-consuming to prepare for

• You’re better able to track and measure goal execution by checking

in more frequently

• Formal annual reviews still encourage judgmental, subjective

appraisals instead of objective feedback that facilitates improved
performance and development of strengths

page 18
Step 4: Get Rid of the
Annual Review

More than likely, once you roll out real-time feedback throughout the rest of
your company, managers and executives will soon see that the improved
performance and business outcomes are clear, and that there is no longer
any need for a formal annual review. If organizations such as Deloitte,
Accenture, Google, General Electric, Microsoft, Adobe, Gap, and many
other Fortune 500s companies have all seen improvement following their
ousting of the annual review, it can work for yours, too.

The only way to drive employees towards continuous improvement is by

giving them continuous feedback. Through an effective goal setting frame-
work coupled with a pulse survey tool, your managers can hold high-level
check-ins and develop an ongoing communication loop with their associ-
ates for powerful results.

page 19
 Step 5:
Conclusion
Step 5: Conclusion

It’s clear that the annual review needs to be replaced – or at the very least,
supplemented – with a more agile feedback model. Nearly 10% of Fortune
500 companies have already completely ended annual ratings, and judging
by the overwhelming results that they’re seeing (including higher engage-
ment levels, better results, and reduced costs), many will soon follow.

Even if you’re not quite prepared to oust your annual reviews at this very
moment, the steps in this guide will help you facilitate a seamless transi-
tion in which you’ll gradually integrate ongoing, real-time feedback.
As we’ve mentioned here, ongoing feedback is more reliable, facilitates
agile performance management, and helps managers consistently coach
associates through the achievement of ambitious goals. As a result,
employees are developed and improve their strengths, while the company
simultaneously sees better results. It’s a win-win for everyone involved.

Implementing ongoing, real-time feedback doesn’t have to be complex. By

understanding the core components of ongoing performance manage-
ment, using a test group to perform a trial period, and training the rest of
your organization on ongoing feedback, you can soon get rid of annual
performance reviews for good to start achieving improved performance
and accelerated business outcomes.

page 21
Step 5: Conclusion

If you’re a CEO, an executive, a middle-manager, or a front-line manager of

any team, please take a look at how you can improve your team alignment,
performance, and results through OKR goals and ongoing performance
management. Here is more about Atiim OKR Pulse TM.

page 22
 About Atiim

Atiim (i.e. A-team) is an innovative leader in Enterprise Goals Management.

We developed a groundbreaking platform, an industry-first unified 2-in-1
“Ongoing Performance & Agile Goals Management” which are combined
and integrated into one single SaaS product called Atiim Pulse OKR™ – it
helps high-performing companies create better alignment by setting, man-
aging and tracking company-wide business objectives while doing ongoing
performance management. 

page 23
Join Us

www.atiim.com

page 24
Ready to try out
OKRs?

Learn more at: www.atiim.com

page 25
Contact Us:

25 First Street, Suite 303

Boston, MA 02141
USA

Inquiries: hello@atiim.com
(800) 735-4071

page 26
About Atiim
Atiim is building an innovative yet easy-to-use OKR Goals Management
SaaS product which enables fast-growing small and midsize companies to
maximize business results. Imagine all employees getting a clear direction,
understanding what they are trying to achieve, and everyone is aligned to
top corporate priorities and is focused and working on what drives
business results. That’s Atiim.

Atiim’s mission is to help companies and their people work better and win
as a team. We do this by helping maximize each company’s business
results through more effective execution of goals in a way that is more
clear, focused, engaging and meaningful. We enable and empower people
to perform well at work, making themselves and their organizations more
successful, as a team.

Made by Atiim Inc. in Boston, MA. © Copyright 2018

www.atiim.com

page 27
About Atiim
> Learn more about Atiim Pulse OKR ™ OKR Goals Management & Ongoing Performance
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