Base reviews on data, not on subjective opinions

annual review

Every company has a formalized annual review. It exists so the employee can progress in both learning and his or her career. The company can also reward its best performers. Let's look at how the review is mostly done and how it can be based on data.

Traditionally, at the beginning of the year, managers need to set goals for their teams. The goals include soft and hard skills. Soft skills include things like the development of leadership skills and improvement in communication skills. Hard skills include things like learning new technologies and contributing to an important project.

Both soft and hard skills are notoriously hard to evaluate, and very often the evaluation is highly subjective. The reason is that the review is based on the manager's opinion about achievements. For instance: achievements that are done closer to the annual review are more valuable because they are fresh in mind.

Traditional Approach

About a month before the annual review, managers get an email from HR telling them that they need to review the performance of their teams. The managers try to quickly get as much information as possible on everyone. They do 360 reviews to get feedback from everyone else. These are the challenges with this approach:

  1. Recent achievements are more important than old ones. It is true for both 360 and managers' reviews. Nobody keeps track of all the achievements throughout the year.

  2. As managers are not evaluated based on the time that they spend evaluating their teams, they very often treat reviews as a formality.

  3. There is no way to compare the performance of people across different teams. The evaluations are too subjective.

The last item is very important to any big company. An average person in a mediocre team has better chances of getting a bonus than a high-performing person in a very strong team. Companies need to reward and promote the best people, and it should not matter what team they are assigned to.

traditional annual review

Verdad Analytics Approach

Gathering data for an annual review is completely automated. It is done throughout the year, and the report is made available to the manager before the review. The manager logs in before the review and adds comments to the generated reports. They are not allowed to modify the report but should add their opinion and feedback. Why it is better:

  1. The report is completely independent and based on data.

  2. It reflects the whole year. January 1 is just as important as November 30.

  3. The intermediate report is available for the review throughout the year. The manager can use it for quarterly reviews to help employees achieve their annual objectives.

  4. The VA Analytics report allows for comparison between different teams. As the report is based on data and not on subjective opinion, employees can be compared no matter what department or team they are assigned to.

better annual review