At their most primitive, reviews offer documentation of company communication to the employee. At their best, however, they facilitate an ongoing conversation between supervisor and employee.
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Interesting article in Forbes regarding the annual performance appraisal process. I've been recommending in my workshops on Feedback and Performance Management that companies should kill this sadistic exercise and move toward regular coaching conversations. The problem is that most managers don't know how to coach - so their focus is on highlighting the negatives in the annual performance review. Why don't we teach our managers to coach?