The Horrific State of the Annual Performance Review


What Does Anyone Get from the Annual Performance Review?

I recently posted my thoughts about the banality of the annual performance review which sparked some interesting conversations with colleagues and customers alike. In that article I attributed much of the challenge of the review to the lack of objective measurement and the misuse of Likert scales. Several interesting debates later, I still stand by my assertions but want to share some additional challenges that the flip side of that conversation have highlighted to me: the people that create the review frameworks and competency models.

The Operationalization Issue

By far the most common challenge brought to me is one of operationalization; let me describe the symptoms and see if you recognize them:

  1. On paper the competency model looks great it has all the hallmarks of a great role-based framework;
    1. it has job families
    2. it has roles related to the families in it
    3. it has levels within each role
    4. it has a description of what each competency is
  2. There is an agreed a cadence of annual performance review in Q1 each year with a mid-year check in.
  3. There is a spreadsheet to capture results.
  4. KPIs are derived from the annual corporate goals as laid out by the leadership team, then sliced down at each level by function, team and role.
  5. Bonuses, pay rises and promotions are tied to the criteria of the model and performance KPIs.
  6. Included are a set of corporate values which span all roles, in order to make sure there are a common set of competencies for everyone to be rated against in addition to their KPIs and role-based competencies.
  7. Managers have been taught how the model works.

So You Are All Set Then, Right?

With keen anticipation you roll out your shiny new model, you wait for feedback and lo and behold, there is no change in behavior, you do some digging and are told it’s great! Well done you. After a while you start to hear some unofficial feedback via the rumor mill.


 These are a selection of my favorites from our clients:

  • Yeah it’s ok but we just pay lip service to it…
  • It’s just not relatable to the jobs we do…
  • People are feeling excluded by the process…
  • It doesn’t matter how well I perform, I’m on my manager’s black list…
  • The corporate values are not relatable…
  • How can I measure being positive! I’m naturally a low reactor so it’s perceived that I’m negative…
  • I’m very analytical so I consider my responses privately and analyze data before responding, which leads to a perception that I score low in the corporate value of ‘Speed’…
  • I do my job really well, but there is no career progression here…
  • There’s nothing in this for me and it is meaningless…

So What Is the Reality?

Increasingly in today’s world perception is becoming the reality. The perception is that for most the annual review is not a positive experience, and is at best a gating factor to potential reward, and at worst makes the individual feel undervalued in that they cannot achieve their goals. The commonality we have found is pretty simple and falls into a few big challenges:

  1. The competency model at the heart of the annual review doesn’t deliver an outcome and is often deployed without context
  2. It relies upon an individual’s manager’s ability to deploy it in a meaningful way
  3. It is often rolled out in association with activities which are not about development
  4. No one thought about what is in it for the individual – it’s all about what the company wants from them

So, why do we do this? Because we don’t want to force the manager into having yet another one-to-one activity with the team – as if that’s a bad thing.

Operationalizing Success

We have found that communication, structure and participant ‘buy-in’ are the keys to successful operationalization of competence frameworks. You must:

  • Work out what the organization seeks to gain from a competence model.
  • Demonstrate what is in it for your employees and get their buy-in; this has to start from the top!
  • Ensure the model is relatable to the actual activities that the individuals do to be successful in their roles.
  • Ensure your managers understand the value of the model not just to the organization but to them and their teams.
  • Enable the managers to have the right forms of discussion with their team members.
  • Provide a structure that supports the managers and their teams so that the competence framework becomes the center of their development conversations in a truly everyday way – not just annually.

Most importantly if you want to operationalize a model properly it has to have a place in the organization and a value to the participants.

Sounds easy right? Maybe you need a little help in operationalizing an existing competency framework, would like support along your journey, maybe a platform to augment and deliver the data on what you have in place, or just some advice on how to get started – whichever stage you are at, Strategy to Revenue has a wealth of experience in helping companies gain value from their competence frameworks. We are confident we can help, so if you’d like to find out more, do get in touch.