Why We Got Rid Of The Annual Review, For Good

We sat down with Kahina Ouerdane and Joanna Awogni , the visionaries at the helm of GSOFT’s Culture & Organization team. They explain why our organization has decided to go against the grade and cut out the annual performance review from our feedback cycles—for good.

Where Change Needs To Begin

“The issues of the workplace today are very much intertwined with the school system, and I think the first step is to revolutionize education. When you’re young you are interested in learning for the sake of learning, and then at some point in your life you become interested in learning for the sake of getting an A.” (Kahina Ouerdane)

Employee motivation shifts from being intrinsic to extrinsic, and in this shift, purpose and meaning become lost. Tying any sort of learning—in the classroom or the workplace—to grades or rewards removes authenticity from the act.

This stunts creative thinking and innovation, which are crucial aspects of company growth and success (in a workforce that is becoming increasingly automated, creativity will be your ultimate differentiator).

Why We’re Moving Beyond The Grade

“When you stigmatize people with a number, it’s like stigmatizing people with titles. This is another element of the workplace that we will need to one day boldly reconsider.” (Kahina Ouerdane)

Annual reviews are no longer a responsible way to evaluate employee performance. There is too much recency bias , and it’s overly ambitious to expect managers to collect accurate, year-long notes. Moreover, it’s demotivating for employees to feel that they “are” the number that’s assigned to them.

“There’s such a strong bias attached to the grade. You won’t get the best out of people when you tell them they’re a three on five. People tend to take on the meaning of the label you give them.” (Joanna Awogni)

This is why we need to move away from numbers and focus on something less numerically tangible and confining.

The Future Of Management Without Annual Reviews

The nature of management is changing, moving companies away from command and control environments towards self-organized teams and shared leadership.

“Removing the annual review is consistent with removing control and moving towards more self-sufficient teams. Removing fear will create more empowered and purpose-driven employees.” (Kahina Ouerdane)

When people focus on their purpose, rather than a looming grade, there is so much more room for growth, innovation, and creativity. The future of work is less oriented on counting failures, and more focused on embracing mistakes whose genesis was from an intellectual curiosity to test and explore.

Why Companies Still Hold On To The Annual Review

It’s tough to break free from habits—especially since there’s something clean and simple about being able to tie up the whole year in a bow with a final review.

Even if companies understand that the process is broken, the process of change is too heavy for many organizations to implement without clear directions for replacement.

“Alternatives exist, but companies haven’t been curious enough to go and look for them. It requires a lot of thinking, reorganizing, and reconceptualizing of values.” (Joanna Awogni)

Change is scary, but sometimes the initial discomfort is worth it, if not necessary. It doesn’t matter if you are a small start-up or a 50-year-old enterprise. If you want to survive as an organization and meet the needs of the most forward-thinking talent, it’s time to start thinking about putting the wheels of change into motion.

What Employees Really Want

“What always comes up is the topic of feedback. Employees want constant communication, more one-on-ones. They want to learn and develop, constantly. How can this drive be reduced to one conversation and a final number at the end of the year?” (Joanna Awogni)

The direction of growth is forward, but the annual review is tied heavily to the past (or whatever version of it is at top of mind come the time of the annual review).

Getting rid of the “grade” is necessary for any successful learning environment, and what employees care about more than pay or benefits is the opportunity learn and grow.

The “Evaluation” Language We Need To Stop Using, Right Now

Words are full of meaning, connotation, and power, so organizations must consider the ones they use carefully—it will shape the culture of your company, as well as the energy and tone, and therefore how employees perform within it.

“When we change our way of thinking about something, we need to change the way we speak about it, too. We need to stop thinking about ‘evaluating’ one’s performance, and instead, start ‘appreciating’ one’s performance. At GSOFT, our understanding of performance is completely tied to our core values.” (Kahina Ouerdane)

How To Change Your Language

From Challenge to Discussion

Instead of “I want to challenge you on this,” which is not only confrontational, but it divides people, try using more approachable and inclusive language like “Let’s discuss this a bit more.”

From Collaboration to Co-Creation

Collaborating on a project can mean that I sit in my corner and write a book while you sit in your corner and illustrate it—then we merge them together. Co-creation implies really working together on something.

From Evaluation to Appreciation

The word evaluation is probably one of the most loathed words in the English language, so let’s change the way we approach performance. Replace evaluation with appreciation, a more positive, yet still powerful word.

The Solution: Tie Performance To Values, Not Numbers

The first step is to define your company’s core values. Fostering a culture that embodies them can be a challenge, but it’s an indispensable step in the right direction.

“Our values are core to everything that we do, and it’s visible in our day-to-day, the products that we develop, the events we organize and the way that we recruit. They are also at the center of each employee’s development.” (Kahina Ourderane)

Individual grades and performance are not what is most pertinent in the workplace. What matters most is the team, and a collective movement toward common and shared goals based on a value system.

Values are broken down into different criteria on what we call a “Heat Map,” and every 3 months we use the Heat Map to check in on employees’ development. One-on-ones between these check-ins follow up on the progress.

No one is stuck with a number to gauge the criteria. Instead, colours are used to represent an employee’s state of development with regards to the value set:

• Green: Strength to keep up!
• Yellow: Element to start working on over the term.
• Blue: Element to work on now, as it is not yet a strength.

This new method focuses on constant development, which lets employees know that there is always room for growth.

“The goal of this is to focus on potential beyond “what did you do in the past?” to “what can you do in the future?” (Joanna Awongi)

Alison is passionate about all things leadership and future of work. She handles the content strategy for Officevibe, the employee engagement platform that gives managers the key insights they need to become better leaders and have high performing teams.