At this time of year, we are exhorted to look at the year that just passes and take stock of our achievements and shortcomings. Does this ritual help us? Taking time to review is good, however, doing it only once a year means we are unable make adjustments as we go.

In corporate America, the ritual of the job performance review, often only once a year, leaves employees without feedback the rest of the time.  In my opinion, that type of feedback must be taken with a grain of salt, because it favors recent experience and largely ignores activities in the early part of the year.  As a result, and to guard against this type of bias, managers often see things through the lens of the general, and may consequently apply biased views founded in the earliest experiences.

The cost of the enormous stress and workload these annual reviews put on employees and managers is a decrease in productivity and motivation that is unrelated to end of year parties or visions of vacation time. At the end of the day (or year), the annual ritual only useful serves to manage compensation at regular intervals.

What could be a better solution?

Clearly, companies must make decisions on salaries on a regular basis. Is it possible to decouple salary increases from job performance? Studies show that salary increases are, at best, only temporary motivating factors, especially for creative or non-routine work. What other factors could be used to motivate performance? These are wide ranging and may include responsibility paid time off, environmental factors, learning opportunities and one-time bonuses that are tied to specific projects, although these, too, can be two-edged swords.

It goes without saying that feedback, given in the moment, is far more powerful than a trite annual job evaluation document that is written in non-confrontational language, and seldom reflects the totality of an employee’s contribution.

Creating ways to reward, motivate and inspire employees will be an enormous challenge for employers as the demographics change. Millennials, who are used to instant feedback, will reject the boomer generation’s annual performance evaluation practice.  It’s a challenge that can finally eliminate a terrible system.

And what about for ourselves?

Individually, we tend review our performance critically moment to moment. What we tend not to do is take the long view – how did our performance move us closer to our goals? What could we have done differently? Individuals would benefit from a structured self-review process that can support learning and our long-term plans.

So, make it a fun ritual. Better yet, schedule it with a friend who will hold you accountable, and who you can help with his/her own goals. Pour yourself your favorite adult beverage and take the time to review your year, what went well and what could have been better and make plans for the year to come. And while you’re at it, schedule similar reviews at quarterly intervals.

Here’s to a great 2018!