The Mindful Leadership Blog

Just In! Annual Reviews Cost Big Bucks and Kill Motivation

May 9th, 2019

What’s hot?

The Corporate Executive Board reports that the average manager spends 210 hours and the average employee spends 40 hours annually on performance management activities.  Multiply those numbers by the average hourly pay of each and then multiply it by the number of employees in each category to get an idea of what your organization is spending.

# of managers x average salary cost per hour x 210 hour = $____

# of employees x average salary cost per hour x 40 hours = $____

Your Cost $_____

 

 

 

 

 

 

So what?

Get this:  A study of 23,339 performance ratings from 40 organizations reveals that organizations with highly rated employees are no more profitable than those with low rated employees.

What to do?

  1. Test a simpler approach to performance management. Find a volunteer department – one that is willing to forego the low-value, complex time- consuming aspects of the annual review process.
  2. Teach managers and employees how to do two things:
    • Set agile goals – challenging short-term achievement targets – that can be adjusted based on regular discussions about progress.
    • Hold regular one on one discussions about two aspects of goal achievement: What is working and what else is needed.  Notice there is no mention about feedback (more about this in the second blog of this series).

Want access to even more ways to encourage peak performance?  Click here to get your free copy of how to “Debunk the Myths and Master the Mysteries of Motivation” from instantaccess’ Secrets of Consultants series.

 

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