28. November 2023

Why is everyone talking about… performance reviews?

Personio Pulse: This Week in HR - 1

Welcome to Personio Pulse: This Week in HR, where each week we take a look at the latest trends in the world of work, what you need to know about them and what they mean for you as an HR professional. 

This week we’re covering Block’s decision to get rid of annual performance reviews (and how organisations can bake in continuous feedback).

What you need to know

Jack Dorsey, CEO of Block, a financial services and mobile payments company (and ex-CEO of Twitter), recently announced plans to eliminate both annual performance reviews and performance improvement plans (PIPs) across the organisation. 

Taking their place would be more frequent performance evaluations — a continuous methodology that would effectively evaluate employees on a week-to-week (or similar) basis. 

Is this the best way to run reviews and rate performance? In general, is it time for organisations to rethink how often they run reviews (or if they run them at all)? 

What others are saying about it 

Christian Westin, Leadership Development Lead at Personio, offers the following insight: “We’ve had a lot of conversations about the need to drive a culture of continuous feedback, and the importance of ongoing, quick and habitual conversations… I’d emphasise performance development over the tendency for organisations to focus on performance management. The former feeds into the latter, but is far broader.” 

He added: “Our approach has been to bring in manager effectiveness scores in our employee listening, and to use ‘light touch’ performance check-ins to help drive these conversations alongside our official performance evaluation cycles — but not to rely solely on evaluation processes.”

What that means for you

From our perspective, there is definitely still a place for performance reviews. But the emphasis needs to be more on the development side of the equation and less on purely managing performance (which can often neglect that development is not strictly linear). 

Framing performance reviews in this way also encourages employee engagement and buy-in; they're just as much about helping people progress in their careers as they are about tracking job performance (perhaps even more so).

Here are some things HR might want to consider: 

  • Craft a shared vocabulary: Whether through training or other means, you should establish a clear, holistic framework for rating, evaluating and rewarding performance across your entire organisation. 

  • Revisit review frequency: The number of reviews you run yearly might change, but consider baking in a light-touch conversation between managers and their reports which can happen more frequently. 

  • Continuous feedback is key: Encourage your managers to start by soliciting feedback from their reports to create a better permission structure and an understanding that continuous feedback is always welcome. 

What else should I read? 

That's all for this week's edition of Personio Pulse: This Week in HR. Check back next week as we continue to dissect the latest trends impacting the ways we work. 

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Max Specht

Max Specht

Max Specht is a Senior Content Marketing Manager at Personio. He enjoys writing and discussing topics related to employee engagement, leadership development and process optimisation.

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