Annual reviews are the two words that cause many to think “oh here we go again”.

Line managers dread the mountains of paperwork required and the potential for some very awkward conversations and employees are anxious and stressed about what is in store.

Traditionally, companies have settled for an annual review and reserved frequent appraisals for new members of staff, those who have transferred to another position or who they have noticed have struggled with their performance. In the last few years, there has been a shift towards ditching the formal annual review and carrying out more evaluations periodically throughout the year.

Are annual reviews compulsory?

The first thing to point out is that there is no legal obligation imposed on employers to conduct an annual review, but they can be very useful. Just like with probationary periods, annual reviews are a tool used by employers to monitor employee’s performance, assess their potential, identify any development or training needs and address any issues that may have arisen.

Why are annual reviews getting the chop? 

Annual reviews are falling out of businesses’ favour because many have found that it was time-consuming, cumbersome and not delivering the value intended.

Employees often feel that annual reviews do not accurately represent their performance during the whole year and there was little follow up on the objectives set out in the review, which can be highly discouraging.

What is the value of having frequent reviews?

Regular dialogue and feedback allow managers to be more responsive – it gives them the opportunity to provide positive feedback for projects as they go along, address any issues when they happen and settle grievances and concerns quickly and effectively. This can have a positive effect on productivity, engagement and retaining your top talent.

It also means that if you do need to resort to formal procedures to tackle performance issues.

What is best for your organisation?

The bottom line is that the way appraisals are conducted will vary from company to company.  There is no magic formula which dictates how many reviews you should be carrying out. What really matters is finding the best approach that best suits your business, keeping it under review and seeing what can be improved. It is also essential to make sure that your managers are suitably trained and employees understand what they can get out of the process.