Getting Rid of Annual Reviews Isn’t the Answer

Your employees want feedback. You want to improve their performance and help them in their careers. And yet, both giving and receiving feedback appear to be universally loathed.

It’s no longer news that annual reviews are unpopular. The headline of a 2013 Washington Post article summed up the then-new research: “Study finds that basically every single person hates performance reviews.”

It shouldn’t come as a surprise, then, that only 30 percent of people actually incorporate feedback, making it not only unpleasant but unproductive.

Only 30 percent of people actually incorporate feedback, making it both unpleasant and unproductive Click To Tweet

On the other side of the desk, according to a recent Zenger/Folkman survey, 44 percent of managers agreed that giving negative feedback was stressful — so stressful, in fact, 21 percent “admitted they avoid giving negative feedback” altogether.

Moving Away From Annual Reviews

Employees feel ambushed if they only get feedback once a year.

As researchers have identified some of the problems of once-a-year feedback over the last few years, a number of big names — from Adobe to Zappos — made news ditching or supplementing annual reviews. There’s good reason for those moves. Annual reviews make everyone involved anxious, putting a strain on the relationship between those giving and receiving feedback. Employees feel ambushed if they only get feedback once a year. And, in fact, annual reviews are likely to focus solely on recent events. It’s hard for anything that happens in such a fraught and biased context to yield positive results.

See also: How to transition from annual reviews to real-time feedback

Yet, only some of the challenges of feedback are the result of cramming it all into one tension-filled annual ritual. Certainly, more frequent feedback “lowers the stakes in each of the conversations.” But supplementing or replacing the annual review process doesn’t address the emotional challenges of feedback.

In fact, increasing the frequency without creating a real culture of feedback can aggravate the original problems, rather than resulting in more accurate data and happier, more productive teams.

Your Brain On Feedback

We’ve all been on the receiving end of feedback that made us feel bad in one way or another: We know it can affect employees’ commitment and engagement.

Ironically, it can even diminish their ability to perform.

According to David Rock, director of the NeuroLeadership Institute, “People who feel betrayed or unrecognized at work experience it as a neural impulse, as powerful and painful as a blow to the head.” This may sound like hyperbole. However, because our brains “experience the workplace first and foremost as a social system,” feedback can, in fact, trigger a threat response.

For example, humans, you may have noticed, are incredibly sensitive to questions of fairness. Rock notes, “The perception that an event has been unfair…stir[s] hostility and undermin[es] trust” — either of which can make teamwork impossible.

Perhaps the trigger most recognizable to those of us who aren’t neuroscientists is uncertainty. Uncertainty takes a toll because we’re expending extra neural energy worrying. That’s energy we can’t use to call up memories or focus on what we’re doing.

Uncertainty takes a toll because we’re expending extra neural energy worrying.

“The threat response is both mentally taxing and deadly to the productivity of a person — or of an organization. Because this response uses up oxygen and glucose from the blood, they are diverted from other parts of the brain, including the working memory function, which processes new information and ideas. This impairs analytic thinking, creative insight, and problem solving,” Rock writes in Managing with the Brain in Mind.

And while it’s true that most of us have learned to cope with some level of negative feedback, there is the real danger of becoming disengaged in response.

Getting It Right

The benefits of getting feedback right are significant:

  • More accurate feedback
  • Better performance, including more successful teams
  • Increased retention

Getting it right doesn’t just mean avoiding a threat response; it triggers a reward response. Everyone becomes “more effective, more open to ideas, and more creative” because we’re able to take in things we can’t if we’re feeling resentful or afraid.

Higher-quality conversations drive trust and engagement, key to the efficiency gains, better knowledge sharing, and growth potential that are key in agile organizations.