Why Annual Reviews Are Failing Your Team – And How to Fix It Now
October 02, 2024 | 252 Views
At the recent CHART Hospitality Training Conference in Chicago, a standout session titled "Check Out Check-Ins: An Innovative Approach to Performance Management" was facilitated by Serah Morrissey, Senior Director of People and Culture at Schoox and Past President of CHART. During this breakout, Morrissey provided a compelling critique of traditional performance reviews and offered an alternative that better aligns with modern hospitality organization needs and employee expectations.
The pitfalls of annual reviews
Annual reviews have long been the cornerstone of staff evaluation in our industry. As discussed in the session, however, only 14% of all workers strongly agree with their performance review results, according to a Gallup poll, and these reviews are often plagued by a long list of biases that render them ineffective and demotivating. The nature of these biases and the context in which they arise make long-term reviews particularly problematic.
Here are some of the key biases and limitations that were highlighted during the session:
Recency – Without a doubt, this bias is one of the biggest flaws when it comes to annual reviews. Managers will often remember and focus on the most recent actions of employees rather than considering their entire output for the year. As a result, evaluations will be skewed based on their successes or failures in the past few weeks or months rather than an accurate reflection their overall contributions throughout the year.
Primacy – While recency bias skews evaluations towards newer events, primacy bias can have an equally distorting effect by giving undue weight to an employee's initial performance. When a worker makes a strong first impression – whether positive or negative – this early perception can overshadow their subsequent actions and color the entire review process. Even if a crew member’s abilities evolve significantly over the year, the manager’s evaluation may still be anchored to those initial impressions, leading to an unbalanced and potentially unfair assessment that fails to reflect the employee’s true growth or challenges over time.
Affinity – Managers may subconsciously favor individuals they personally like or connect with, which can lead to an unfair evaluation process. A manager might feel a stronger affinity for an employee who shares similar interests, such as a passion for a particular hobby or sport, or who comes from a similar background, like attending the same school or previously working for the same company. This connection can also stem from shared communication styles or personality traits, such as both being extroverted or having a similar sense of humor. These affinities can cause the manager to overlook areas for improvement and give the employee higher ratings than they might otherwise deserve, and they can be exacerbated in annual reviews because there is often insufficient feedback throughout the year to counterbalance these personal preferences, leading to skewed evaluations that do not accurately reflect the employee’s overall performance.
Halo and horns – This bias occurs when one positive or negative trait overshadows other aspects of an employee's work. If Mike excels in food prep, for example, his manager might give him high marks across the board (even if he isn’t the best at guest service), or conversely, a single flaw in Mike’s daily tasks might unfairly diminish the recognition of his broader contributions and drag down his overall evaluation.
Central tendency – Some managers avoid the extremes of the rating scale and opt to rate most of their staff as "average" to avoid making difficult decisions or confronting issues directly. This bias dilutes the effectiveness of the review process, as it fails to differentiate between high and low performers and leads to a lack of meaningful feedback.
Idiosyncrasy – Managers may rate skills they are not proficient in more highly, leading to inconsistent evaluations. If I’m incredibly slow using the reservation system, for instance, I might rate other users high in this area because they seem so much better than me in comparison (even if they are really only adequate).
Contrast – This bias involves managers comparing one employee's performance to others rather than objective standards. In the context of annual reviews, where managers may evaluate multiple subordinates simultaneously, contrast bias can become more pronounced as managers inadvertently pit them against each other rather than evaluating on individual merits.
Leniency – Some managers, especially those who are conflict-averse, may shy away from giving honest assessments and opt instead to rate employees more favorably to avoid uncomfortable conversations. This tendency to soften evaluations can result in inflated ratings, where certain team members are judged more highly than their actual contributions warrant. Over time, leniency bias undermines the integrity of the evaluation process, leading to unfair assessments that fail to address areas for improvement and ultimately stunt team development.
The case for check-ins
Given the many issues with traditional annual reviews, many businesses have been exploring more effective approaches. One such method, championed by Morrissey, is the concept of regular check-ins – brief, focused conversations that occur much more frequently than annual reviews.
These check-ins offer several advantages:
Ongoing feedback – Regular check-ins allow for a continuous dialogue between managers and employees and make the insights more timely, relevant, and actionable. By providing input in real-time or close to when events occur, check-ins reduce the impact of recency bias and ensure that evaluations reflect an individual’s performance over a longer period rather than just the most recent actions.
Increased engagement – Employees are more likely to feel engaged and motivated when they receive regular feedback and can discuss their progress. Frequent interactions help managers build stronger relationships with their team members and reduce affinity bias as evaluations become based on consistent observations rather than sporadic interactions, which can lead to higher job satisfaction, better work results, and reduced turnover.
Flexibility – Check-ins can be tailored to the specific needs of the company (or the specific needs of a singular hotel or restaurant location) and the individual. For example, one check-in might emphasize personal development, while the next might address project progress. This flexibility allows managers to avoid the halo and horns effect by concentrating on targeted areas of performance and ensure that one strength or weakness doesn’t overshadow other aspects of an associate’s work.
Improved communication – Regular check-ins promote open communication within the team and help to foster a culture of trust and collaboration. By discussing their work more frequently, managers can provide more accurate and balanced assessments and reduce the risk of central tendency bias, where all employees are rated similarly to avoid conflict. This ongoing dialogue also helps address issues before they escalate and ensures that everyone feels supported in their roles.
Enhanced personal accountability – With frequent check-ins, staff members are encouraged to take greater responsibility for their performance. Regular discussions about goals, progress, and areas for improvement help workers self-reflect and adjust their actions accordingly. This continuous loop of feedback and adjustment can diminish the impact of confirmation bias, as both the employee and manager have regular opportunities to challenge and refine their perceptions based on new information.
Actionable steps for implementation
OK, hopefully I’ve sold you on check-ins as a replacement for traditional performance reviews (or rather, Serah did, since this article is based on her class). For hotel and restaurant companies that would like to take that journey, here are some suggestions to guide the transition:
Start with a pilot program – Begin by introducing check-ins on a smaller scale, perhaps within a single department or team, to gauge effectiveness and gather feedback. This pilot phase allows your organization to experiment with different approaches, refine the process, and identify potential challenges without committing to a full-scale rollout. Also, by collecting data and insights from the pilot, you can make informed adjustments that will smooth the path for broader implementation across the company.
Educate your team – To ensure that managers understand the purpose and process of check-ins, your team should provide training on why you are making the change and how to ask the right questions, give constructive critiques, and avoid common biases. When everyone understands the goals and mechanics of check-ins, they are more likely to embrace the process and see it as a tool for development rather than a bureaucratic requirement.
Separate compensation discussions – To keep check-ins centered on development and growth, consider detaching compensation decisions from these evaluations. Discuss wage hikes and raises separately, perhaps during a dedicated meeting or at a different time of the year. This divorce ensures that check-ins concentrate on professional progress rather than being overshadowed by salary negotiations, which can shift the conversation toward immediate financial concerns instead of long-term improvement.
Use technology wisely – Leverage digital platforms that facilitate and streamline the check-in process so that it is easy to manage. These tools can help automate reminders for both managers and employees, track progress over time, and store assessments for future reference. Additionally, technology can offer templates and guides to ensure consistency across the organization while allowing customization to meet specific team or individual needs. If you need suggestions on how to find the right platform that will help to reduce your administrative burdens, please check out my CHART articles on sources to find tech vendors and questions you should ask in the vetting process.
Regularly review – The implementation of check-ins should be a fluid, evolving process, so you should frequently gather feedback from participants to understand what’s working and what isn’t working and be prepared to make adjustments as necessary. This approach allows your organization to continuously refine the check-in process and ensure it remains relevant, effective, and aligned with both organizational goals and employee expectations.
Conclusion
The shift from annual reviews to regular check-ins represents a critical evolution in hospitality performance management. By addressing inherent biases and fostering a culture of continuous feedback, this approach offers numerous benefits: improved employee engagement, better results, and enhanced talent retention. Those hotels and restaurants that lead the way in modernizing their performance management practices will not only elevate their operations, but also position themselves at the forefront of the industry and be better equipped to deliver exceptional experiences for both guests and workers alike.