The End of Annual Performance Reviews?

As experts and observers monitoring the business effects of the ongoing COVID-19 pandemic speculate on big-picture questions such as the future of physical offices and the difficulty of maintaining corporate culture in a remote work environment, the fate of something as quotidian as the annual performance review may seem like a minor footnote.

But given its ubiquity throughout the corporate world, if the traditional performance review really is in danger of fading out as a result of the pandemic, it’s probably a topic worth exploring. That’s clearly how Fast Company saw it, which is why the publication devoted a recent installment of its Shape of Tomorrow series to the question, “Do we still need formal performance reviews?”

The answer is clearly a “no” from Intel’s vice president of human resources and director of global rewards and talent retention Julie Ann Overcash, one of several leaders who weighed in on the question. Intel, after all, had already moved from a yearly performance evaluation review system with ratings to one that measured results in a conversation-based program even before the pandemic hit. The idea was to foster conversations between managers and employees throughout the year and to focus on appreciating and coaching employees around the core elements of results, culture and learning.

“When we developed the system, we wanted a quick and easy tool so that all of the leaders can share the things that they appreciate [about an employee, and] areas where they want to coach,” Overcash says. “Then we take a snapshot of [the review] three times a year so that the employee can carry that [with them if they transfer departments or get promoted]. Most leaders are having those [talks] either monthly or sometimes biweekly with their employees. To us, that’s great success.”

At process management and workflow automation company Nintex, meanwhile, director of presales Vadim Tabakman believes the increase in communication at the firm that has arisen from the sudden move to remote work has made it easier to shift to more frequent employee-manager conversations – potentially rendering the old annual review process moot. Now goals are laid out for 3- and 6- and 12-month periods, which means everyone knows what needs to get done (and when) and discussions about how those goals are progressing are ongoing.

“I don’t think that a lot of the stuff that we’ve now learned and implemented is going to change,” he says. “We’re going to continue having this more regular communication. We will still do the performance reviews, but I think a lot of [the conversation] is going to happen earlier.”

Even for organizations like online education provider Udemy, where formal annual performance reviews remain an integral piece of the employee experience, there have been adjustments to reflect the realities of how people are working today that are likely to transform how the process looks going forward. SVP of people, places and learning Cara Brennan Allamano says the company is now focusing more on how team members are adapting to and making the most of their new work situations – and that the review process will likely adapt right along with them.

“Our real concern is around innovation and creativity,” Allamano says. “Research says that productivity can increase when people go home, but it hasn’t really identified specifically how you really innovate in an environment where there isn’t a lot of that informal connection time. So that’s our bigger concern for the future.”