9 Ways To Think Outside The Annual Review

BECU and MSUFCU provide lessons in communication and expectation.

Talent management is changing, and in no place is this more apparent than in the employee review.

Once upon a time, reviews were a formalized, annual process. At many organizations, they still are. However, many companies, credit unions included, are ditching the annual review for a less formal, more communicative process.

But how do these organizations earn the senior level buy-in necessary to change a process as ingrained as an annual review? Two credit unions BECU ($17.2B, Tukwila, WA) and Michigan State University Federal Credit Union ($3.6B, East Lansing, MI) offer nine best practices for how they think outside the annual review.


Data as of 06.30.17

HQ: Tukwila, WA
ASSETS: $17.2B
MEMBERS: 1,044,378
12-MO LOAN GROWTH: 13.4%
ROA: 1.33%

No. 1: Pay Attention To The Trends

In 2015, human resources employees at BECU noticed more articles and case studies were covering changes in performance management.

There was this buzz in the media, and we wanted to understand why it was happening, says BECU’s director of talent development Jeffrey Duke. What is the trend? What does it mean for us?

At the time, BECU conducted employee reviews wherein managers would rate employees by numeric scale on competencies, then meet with employees twice a year to review these ratings.

The problem? It took a long time to put together these reviews, and the review itself was anxiety-inducing.

It’s like getting your report card at the end of the year, Duke says.

In July 2017, BECU launched a new review initiative. Now, managers conduct quarterly conversation-based check-ins with their employees, and employees evaluate the content of each meeting through a survey.

No. 2: Pay Attention To The Employees

Like many credit unions, MSUFCU conducts employee surveys to stay current with wants and needs. And according to Silvia Dimma, MSUFCU’s chief human resource officer, there is valuable information in the comments.


Data as of 06.30.17

HQ: East Lansing, MI
MEMBERS: 238,802
12-MO LOAN GROWTH: 19.5%
ROA: 1.23%

That’s where, more than three years ago, the credit union noted a trend.

There were several employees who wanted more regular feedback with performance and what steps to take to advance their careers, Dimma says.

In 2014, the credit union ditched its annual year-end essay-style review that highlighted employee accomplishments. Now, employees and managers meet biweekly to discuss past and future performance, career development, goals, and skill development.

We essentially review the past two weeks and look forward to the next two weeks, Dimma says. The meeting is more focused, which makes it easier for employees to take and give feedback and for the manager to provide resources and coaching.

No. 3: Annual Reviews Are Like Going To The Dentist, And People Don’t Like That

BECU moved away from annual reviews to quarterly check-ins, in part, because of the anxiety the review inspired in employees. The intent of the more frequent meetings, says Duke, is to relieve this anxiety while also providing employees the opportunity to have more regular discussions about performance and development.

Most people will tell you annual reviews tend not to be fun events, the director says. They’re like going to the dentist. People don’t look forward to it.

But reviews are a valuable tool, too, so credit unions need to make room for evaluations in their talent development strategies.

They are about providing feedback, having two-way dialog, and setting clear expectations, Duke says.

Because of the frequency of these conversations, everyone is more relaxed and more open to speaking. They are focused on small pieces rather than reviewing the whole year.

Silvia Dimma, Chief Human Resource Officer, MSUFCU

No. 4: More Conversations, More Often, Make Employees More Comfortable

For MSUFCU, biweekly meetings help the credit union more effectively set expectations between employee and manager.

Both individuals come prepared to talk about goals, competencies, and progressions. The check-ins work better than annual reviews for this purpose because the discussion isn’t bogged down by yearly performance analysis.

In annual meetings, employees never know what is going to happen, Dimma says.

Biweekly check-ins, on the other hand, make employees more comfortable.

Because of the frequency of these conversations, everyone is more relaxed and more open to speaking, Dimma says. They are focused on small pieces rather than reviewing the whole year. ContentMiddleAd

No. 5: Structure The Conversation

At BECU, quarterly performance check-ins have a set structure, and everyone knows what to expect.

According to Duke, the conversation contains three sections:

  1. A discussion of performance over the last three months.
  2. A discussion of performance expectations for the next three months.
  3. A discussion of support and what employees need to be successful for the next three months.

Managers take notes and track conversations overtime. This tracking allows managers to see how employees perform quarter-over-quarter and identify coaching areas.

No. 6: Don’t Forget To Train Managers, Too

Before it rolled out its biweekly check-in structure, MSUFCU led its managers through a training course where they learned both high-level and technical skills, including holding coaching sessions, providing feedback, and imputing information into their talent management system.

Managers will continue their training to develop hard and soft skills and push themselves out of their comfort zones and introduce a new element to their own career development.

Sometimes, you get too comfortable in your process, Dimma says.

They didn’t feel like the check-in was being done to them. Rather, it was something they were participating in.

Jeffrey Duke, Director of Talent Development, BECU

No. 7: Take Measured Steps

BECU’s first quarterly conversation took place in July 2017. The next will occur in October.

Three of the four quarterly check-ins will follow the same format, but for the time being, the credit union plans to use the first check-in of the year to review the previous year.

We’ve eliminated the formal mid-year review and replaced it with second, third, and fourth quarter check-ins, Duke says. First quarter will remain our annual review.

Except different, of course.

More check-ins will shrink the scope of the annual review, and employees will have better and more frequent conversations about their expectations throughout the year. But BECU wanted to retain the first quarter annual review to make sure it wasn’t going too far in redesigning this process.

There are a number of companies who early on eliminated reviews and ratings only to bring them right back, Duke says. We wanted to make sure whatever we did was appropriate and valuable. So, we’ve taken a measured step.

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No. 8: Stay On Schedule

Biweekly conversations at MSUFCU are supposed to run between 30-60 minutes, Dimma says. That’s because managers often have conversations lined up over the course of the same day. Sometimes, though, conversations can run long.

Sometimes they take two hours, the chief HR officer says.

When that happens, managers might have to postpone later conversations. It’s a difficult trade-off. The credit union wants to encourage consistent feedback between manager and employee, without forcing them to cut their time short or postponing other conversations that need to take place.

We are trying to see how can we focus these conversations and use everyone’s time appropriately, Dimma says.

No. 9: Listen To Employees

After each quarterly check-in, BECU employees are encouraged though not required to complete a five-question survey to rate the value of the conversation. Employees rate the following five statements on a scale from strongly agree to strongly disagree.

  • I know how my immediate supervisor views my performance for the past quarter.
  • Last quarter I received the development and support I needed to be successful.
  • I received feedback throughout the quarter, so I was not surprised during our quarterly check-in.
  • I know what is expected of me for the coming quarter.
  • I believe I can achieve what is expected of me for the coming quarter.

After the July check-ins, Duke says the credit union received a 75% participation rate on the survey. The responses to which served to underscore the overall point of the conversations.

The strongest piece of feedback was the dialog, Duke says. Employees felt engaged. They didn’t feel like the check-in was being done to them. Rather, it was something they were participating in.

September 4, 2017

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