Once A Year Performance Review vs. Mentoring: NO CONTEST!

Performance Evaluation[su_dropcap style=”flat”]I[/su_dropcap]T’S TIME FOR your annual review. Aaarrrggghhhh! My sentiments, exactly.

Before I started my company, I worked for several organizations that used annual, ratings-based performance reviews. To tell you the truth, I never liked them. It didn’t matter whether I was praised, given a raise, promoted, or given the list of what I needed to do to improve. Even worse, was being rated on a scale of 1-5 or 1- 10. The process was uncomfortable at best – for my bosses and for me. When I managed employees and had to do those reviews, I liked them even less.

Good news! After almost two centuries, change is in the air. According to an article in the November 2015 Harvard Business Review, a significant number of major global corporations have retired their once a year, ratings-based systems.

Instead, they’re creating a much more supportive approach to performance management that includes mentoring, coaching, and skill building. It centers on frequent, quality conversations between managers and their teams. These are conversations about corporate, team and personal goals, improved capability and capacity, overall progress, accountability, immediate and actionable feedback, compensation, and the future. And it’s working.

In a comprehensive study of 33 U.S.- based companies that have made the shift away from traditional ratings-based reviews, David Rock and Beth Jones of the NeuroLeadership Institute discovered these results.

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  1. As the frequency of manager-employee conversations increases, performance and engagement improves.
    All of the companies increased the recommended number of manager interactions with their teams, most going from the old once a year, to a minimum of four times a year.
This one change powerfully demonstrated that on-going mentoring and coaching conversations increased engagement, productivity and staff retention. They saw that performance and engagement were strongest when employees experienced being supported by a manager’s guidance and coaching and when they had more ownership of the process. Researchers also found that the new focus on quality conversations was well received by both employees and managers.
  1. Companies significantly reduced the administrative burden of their managers.
    Twenty-two of the 33 organizations studied, formally reduced managers’ documentation requirements with fewer and simpler forms. Another 11 companies eliminated documentation requirements altogether.
According to another Harvard Business Review article, companies dedicate between 30 and 40 hours per employee review. This level of investment is just too high for a process that so clearly fails to improve performance and often, drives good people away.
  1. Companies still use pay-for-performance or pay differentiation.
    The new process allows managers to get to know their people better through higher-quality conversations about performance, then, differentiate compensation based on their own judgment. One multinational retailer reported that this new strategy resulted in a dramatic drop in the number of complaints about compensation review season.
  2. Well-designed change management was essential to a successful transition.
    A few organizations regretted rolling out their new performance management platforms too quickly. Taking the time to execute a strong change-management strategy was essential to success.
Educating line executives about the business case for the change was a critical step. They took ownership of the initiative and were more inclined to advocate for both the importance and urgency of the change. Teaching them how coach and mentor effectively make the process even more efficient.[/message][su_spacer]

Imagine the possibilities for your company. No more fear-inducing, backward-looking performance reviews. Instead, managers would coach and mentor employees. These periodic conversations would empower managers and their teams. Together they would align their goals and values with those of the organization and the team. Managers would provide support and encouragement for professional development and growth. They would be able to focus on the future and produce extraordinary results. That’s a system that allows everyone to win.


Susan Bender Phelps
Susan Bender Phelps
SUSAN Bender Phelps is a corporate trainer, speaker and author. As founder and lead trainer of Odyssey Mentoring & Leadership, she helps clients create a culture of learning and support that allows their people to deliver breakthrough results time after time. Susan has 30+ years of experience working with leaders at all levels of organizations in many industries, including federal, state and local government, colleges, universities, for-profit and not-for-profit. Industries include healthcare, parks and recreation, advertising, accounting, scientists, physicists, architects, consulting engineers, construction, unions and clergy. Susan speaks nationally on mentorship, leadership and communication. She is the author of Aspire Higher, a collection of true success stories of career and business mentoring. She has a bachelor’s degree in Communication and a master’s in Management & Organizational Leadership. She is a certified SCUBA diver and loves to travel the world.

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  1. I love this Susan. I think Ancient Egyptians started this when building the pyramids. I strongly believe in coaching, mentoring and Dynamic Engagement. When I do a coaching report I ask. Tell me where you need to go this month and how will we get you there? Thank you for sharing

    • It truly is amazing what your staff will do when they know that you are engagedand listening to them. They know that what they say and do matters

  2. I have never liked the annual review process. It creates stress for all parties, is too little too late, and I can’t imagine who thought that would be a good idea.

    If a manager/supervisor is only giving feed back to an employee annually, then something is very wrong. Even if a good point is made, it has been months in coming to the surface where it can be acted upon.

    • That is so true. We also know that when we are given a correction, for example, before the issue has become a festering wound of an issue, emotions on both sides are calmer and a spirit of collaboration can thrive. Once tempers flare and defenses go up, it is much harder to come to a win-win solution for both parties.

  3. Annual performance reviews are extremely useful when they are actually gauging the performance of the individual they are actually reviewing. This is not the case. The person in the review is a construction of assumptions, most often invalid, with information that at the time of the review is also invalid.

    When mentoring, the information is being processed all in real time for the person that exists right now.

  4. Finally! A business owner who knows what works to improve engagement, increase productivity, and build relationships. I have shared my own opinions on this topic several times. Thank you, Susan Bender Phelps for this article that supports a practice that is effective and recognizes potential.

    • I am humbled by your praise. Thank you for reading. There is no higher compliment to a writer, than to know that my words touched you.

    • Cathy, In my work I’ve learned these skills don’t come naturally to most people. This is why I do what I do. I teach the skills these managers need to mentor and coach. – thereby, improving their relationships with their direct reports, improving productivity, and job satisfaction, while reducing turnover.