At first thought, it would appear sensible to assume the act of ranking your employees on the merits of their performances is a great way to determine who your strongest workers are. Providing performance reviews which outline their strengths and areas of opportunity, therefore, would appear to be an apt way to both reward top performers and strengthen the output of those who are lacking in certain areas.

But let’s give this approach some more thought, shall we?

Evidence has surfaced citing the performance review as a failing practice. The idea is that evaluating employees during the mid-year or at year’s end is not an accurate way to either understand employee performance or improve it, if necessary. Studies have suggested that the “hands-off only to put hands-on twice a year” way of employee performance assessment is counterproductive.

On, Santi Garcia reviews a report written by Nik Kinley on Strategic HR Review. He notes that Kinley believes there is no evidence suggesting employee performance evaluations impact their performances or provide better results for organizations overall. Garcia also highlights a 2014 Deloitte Human Capital Trends report which stated that only 8 percent of survey respondents believed annual performance reviews were effective uses of their time.

Regular check-ins and feedback breed greater success.

A joint understanding between the two studies is that forced ranking systems should stop in favour of having shorter feedback cycles and more frequent evaluations. In other words, a much more hands-on approach to providing employee feedback and boosting employee morale is necessary in order to foster stronger performances and overall greater company success.

Peter Cappelli and Anna Tavis appear to strongly agree. The writing duo for the Harvard Business Review cites the studies of a number of professional service firms to highlight how traditional appraisal processes no longer seem valuable. Cappelli and Tavis point out the biggest limitation of annual reviews as the emphasis generally placed on offering employees either financial rewards or punishments based on their end-of-year evaluations.

“They hold people accountable for past behaviour at the expense of improving current performance and grooming talent for the future, both of which are critical for organizations’ long-term survival,” they write, “In contrast, regular conversations about performance and development change the focus to building the workforce your organization needs to be competitive both today and years from now.”

Traditional performance reviews tend to limit growth.

Cappelli and Tavis also point out going the way of the traditional performance review suggests that once you hire an employee, you “get what you get”. The idea that there’s no room for improvement regardless of the number of feedback sessions, places companies in positions where there is little room for progress.

On the other hand, there is growing evidence to support the second approach – an emphasis on improvement and growth. It will help to support better performances, greater loyalty to companies from employees and increased company success overall. “The new perspective is unlikely to be a flash in the pan,” Cappelli and Tavis predict, “because it is being driven by business needs, not imposed by HR.”

For more expert advice on how to evaluate the performances of your employees, contactHire Value Inc. today!