HCM Annual Reviews

HCM annual reviews

Are annual reviews the enemy of employee engagement?

Andy Campbell, HCM strategy director at Oracle @Axcampbe


An annual conversation no longer reflects the ways in which roles and employee preferences have changed

Accenture recently added its name to the list of companies doing away with employee annual reviews. It is a trend which is gathering pace and it is easy to see why.

In the past it may have been common for an employee to stay with a company for decades and their progress to be more structured and more closely linked to tenure. Likewise, changes to their role and their employer’s business model may have been less frequent. However, average tenure is down and companies need to react to rapidly changing business conditions more quickly than ever.

With employees squeezing more work, more experience and more changes to their role into shorter, more intense periods of employment, an annual review hardly seems a fitting way to keep pace.

Add to this some significant cultural changes regarding the way we interact. We are now connected to a greater number of people than ever before, managing relationships more sporadically. We’ve come to expect a level of contact that reflects what is happening right now, not what happened three, six or even 12 months ago.

Companies should be asking if annual reviews are still relevant to their workforce. Research conducted by management research firm CEB in 2014 suggests 95 per cent of managers are dissatisfied with their review process, so the answer to that questions may well be ‘no’.

Instead, businesses need to find a scalable, meaningful way to improve engagement with their employees. According to Oracle’s recent “The Changing Nature of Employee Engagement” report, HR departments admit employee engagement is a top priority for them, but only half have an engagement strategy in place.

At the heart of that strategy must be the conversation between employer and employee. It has always been the most important element of the annual review process; it is just the timing and the process itself which have not stood the test of time.

It may be the case that quarterly engagement makes more sense, or engagement based on the completion of specific tasks or projects. It doesn’t need to take up a lot of time or be based on dozens of criteria, it should be about short, focused ‘catch-ups’ or ‘check-ins’ which build a more realistic and reflective record of an employee’s goals, contribution and progress.

Any rethink of employee engagement should also reflect the digital age and make use of the technology available.  Our employees and colleagues already readily share their experiences and opinions on LinkedIn and other social platforms which offer an environment that is intuitive, informative and engaging. It delivers something of value to the individual in a manner that resonates with our social and collaborative natures.  

If we are to continue with performance management then the systems that support the process need to offer an intuitive experience to users, deliver benefit to both the business and the individual and lastly, need to have social interaction and collaboration at their core.

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