Is It Time to Rethink your Performance Review Strategy?

95 percent of managers say they are dissatisfied with their performance review process, and 59 percent of employees feel annual performance reviews are not worth the time invested.

Companies like GE, Microsoft, Accenture, and Netflix are doing away with the annual performance review in favor of more ongoing, informal check-ins. While the traditional performance review process typically involves managers rating their employees’ performance in specific areas of the role, the alternative model involves more frequent, informal conversations between employees and supervisors.

Two businesspeople sitting indoors with coffee laptop and folderFor example, Deloitte recently unveiled a restructured performance review system focused on providing up-to-date, individualized feedback to employees. The process eliminated annual reviews, ranking systems, and numbered rating scales, replacing them with a strengths-oriented, streamlined, four-question review.

Instead of asking managers to rate employee’s skills on a five-point scale, they ask managers to respond to: “If it were my money, I would award this person the highest possible compensation increase and bonus” or “Given what I know if this person’s performance, I would always want him or her on my team”.

These questions focus on the manager’s action instead of their thoughts on the employee’s skills, which greatly reduces the subjective, ambiguous nature of rankings-based assessments.

This approach can be customized for any organization through an in-depth analysis of your organization’s goals and how employees can best contribute to the achievement of those strategic objectives.

There are a few reasons for this recent shift in strategy:

  1. Many organizations find they benefit from more consistent, real-time feedback between employees and managers, and the information gathered can still be used to inform decisions on raises, bonuses, and promotions.
  2. This updated process is also helpful for disciplining and terminating employees, as it provides more robust documentation and specific examples than the traditional model.
  3. A more ongoing performance review process prevents employees from expecting an automatic annual raise as part of the review process.

If you utilize the annual performance review process and find it beneficial to your company, there’s no need to scrap it- as long as your employees and managers are having ongoing, two-way conversations about performance and engagement. Regardless, there are steps you can take to either supplement your current process or create a new policy through this continuous improvement-based strategy, which will provide you with more up-to-date information and more motivated employees.

Here are a few common performance review issues and different options for addressing them with the updated model:PerfReviewBlog

In the end, your performance review process should be designed in a way that works best for your employees, which has different meanings for different organizations.

When making these decisions, HR managers and executives should consider which strategy will facilitate the most effective progress tracking and ongoing feedback. Having this information on hand will help develop specific, actionable steps for continuous improvement on the part of employees, managers, and teams.

Your quarterly or monthly reviews can be created, tracked, and reviewed through the Performance Review module in eStratEx to yield the most beneficial feedback from employees, peers, and managers. Weekly or daily updates can be added through the Quick Notes feature, providing managers with a simple way to track each employee’s performance on a continuing basis. Regardless of your performance review approach, StratEx will custom-design the process from start to finish – reach out to your HR Account Manager or Service Team for help!


  1. SHRM- If the Annual Performance Review Is on Its Way Out, What Can Replace It?
  2. Harvard Business Review- Reinventing Performance Management
  3. CEB Global- Faulty Performance Review Processeses Cost Companies as Much as $35M Annually