However, new research by the global recruitment company Robert Half has found that only 11% of finance leaders believe employees want to receive feedback annually.
In fact, the majority of leaders argue that staff prefer feedback on a more regular basis, as 26% believe employees would like monthly feedback, 14% nominate weekly feedback and another 14% see value in immediate feedback on the spot.
Interestingly, the results found that the larger the business, the greater the preference for annual reviews.
Specifically, they found that 72% of CFOs of large organisations favour an annual performance review, compared to 55% of medium-sized businesses and 52% of small business organisations.
Here, large businesses are defined as having 500+ staff, while medium business have 150 - 499 staff and small businesses have between 50 and 149 staff.
David Jones, Senior Managing Director at Robert Half Asia Pacific, said that performance management (if done efficiently and empathetically) can create a corporate culture that promotes individual growth and success, and improves employee efforts, engagement and loyalty.
“However it doesn’t all hinge on annual performance reviews. There are other ways to keep staff engaged and motivated, and businesses need to be prepared to think outside the square in order to gain the best results, and loyalty, from their people,” said Jones.
Seeking other options
The results of the survey also found that 53% of Australian CFOs believe employee training opportunities can be effective in keeping employees engaged and motivated, followed by 44% who opt for one-on-one discussions.
Another 40% said that encouraging employees to offer suggestions – and putting their ideas into practice – can be a powerful motivator, while just 36% nominate salary increases and bonuses.
Jones added that no matter what the format is, employer feedback is always beneficial to staff career development and advancement.
“Receiving feedback is not only motivating, but by identifying areas for improvement, employees know what to work on in order to further develop their career thereby also increasing their market value,” he said.
Robert Half has identified five alternatives to performance reviews and their popularity amongst CFOs:
Source: Independent survey commissioned by Robert Half among 300 Australian CFOs and finance directors – multiple answers allowed.
The idea which employees prefer to performance appraisals
Are performance reviews a waste of time?
|One-on-one discussions geared toward career development
|Getting employees to contribute their ideas and implementing them
|Providing salary increases and bonuses
|Employee recognition programs and awards
The annual performance review has traditionally been the tool of choice for many employers hoping to keep employees motivated, engaged and loyal to the organisation.