The Dangers, Destruction & Despair

& How to Stop the Madness

Mark Faustby Mark Faust

Who doesn’t love annual reviews?

Umm, like…everyone?!

Think for a moment as to why you conduct annual reviews. What are the objectives? How successful have they been at accomplishing those objectives? Did you even have objectives set around the process? Have you ever measured their effectiveness and if you did, would the joy and effectiveness rating of the annual performance review process get more than a C- from either the evaluated or from the evaluators?

My experience has been that clients who have transformed annual reviews from a once a year performance appraisal and compensation discussion (an event) to a very different process are glad they killed this beast.

If you are guilty of still feeding this demonic effort, it’s time for you to drive a stake into the heart of this monster and begin rebuilding the lost relationships between your managers and the managed.

First realize the untallied costs of this miscreant.

  1. What is the amount of actual time lost in regards to your managers’ productivity when it comes to preparing for these crazy annual demonic rituals?
  2. What is the impact on the psyche of the managers and managed being forced through this bad habit?
  3. How is the esprit d’corps affected within those receiving their annual review? Are they invigorated that every extra effort and strength of theirs was properly recognized or are they feeling that undue emphasis was put on the “improvement areas” and that only a portion of their good deeds and character were recognized in this short once a year meeting?

Next think about the intentions, objectives and potentials that are lost because of this dysfunctional approach:

  1. Realigning each employee with the proper focus on objectives. What amount of time or percentage of focus would you most like to see each employee allotting to what objectives? Isn’t this recalibration of focus something more appropriately broken out monthly, quarterly, or at least semi-annually?
  2. Re-enforcing good behaviors, character and performance. The best practices of the best performing cultures and a fair amount of research shows that “catching people doing it right” is something that should ideally be happening on a weekly basis. Every employee should receive a kudo on a weekly basis. But in regards to doing the right work in the right way, this feedback should be given much more frequently than semi-annually.
  3. Succession planning and talent management. With a fast growing company, there is a constant need to move people up as much as possible. The doubling of productivity occurs with as much as 70% of current duties being delegated, eliminated or innovated upon in order to push those up as fast as they are capable and grow the organization as fast as it is capable. People leave managers and a lack of challenge at a company not the company. If you want people engaged, challenged and in rapport with their manager this requires a frequent mutual discussion around growth and evolution around roles. Annually discussing this area is far too inadequate.

I recommend a semi-annual review of what people see as most empowering and disempowering around what their manager and the company do. I suggest at least a quarterly review around progress on objectives and the related quality of work, both positive and opportunity areas. It is best to avoid only annual compensation adjustments because it is more convenient to your budget, rather promotions and compensation should be made when they are most mutually beneficial to the growth of the company and the individual. The key is pushing the envelope of growth and not fitting to some annual bad habit.

Since 1990 Mark Faust has run a growth and turnaround consultancy, providing facilitators and speakers who’ve worked with clients from the c-level of the Fortune 500 as well as owners of multi-generational family owned companies. Mark can be reached at: or 513-621-8000


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