Why Near Term Business “Trend” Forecasts Shouldn’t Be Trusted

Why Near Term Business “Trend” Forecasts Shouldn’t Be Trusted

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I received a trend notification today of “5 things that will change in the workforce in 2013.” (I will leave the name of the publication out.) One of those items was:  the end of annual reviews.

If this was a decade long forecast, the end of annual reviews would represent a good, controversial, thought-provoking item to include in the list. But as for 2013 being the year, consider that a forecast already missed.

Here’s why.

Annuals reviews are highly embedded into the structure of many organizations, and heavily reinforced by policy, practice and expectation. Organizations invest over-and-over in perfecting, tweaking and redesigning their annual review process. Major corporate activities, from merit pay increases to bonuses are tied in time and delivery, to the annual review process. Human resources organizations are not going to lightly disavow previous investments. Not only are annual reviews highly integrated into corporate cultures, but their very nature belies their rapid demise.  To say that the infrastructure built around annual reviews will collapse in one year is ludicrous, because annual reviews don’t exist on the edge of a single societal or business fulcrum (or tipping point as Malcolm Gladwell likes to call them). In other words, no single event will precipitate the dissolution of such an ingrained institutional activity. The end of the annual review is an evolutionary prediction for which no timeline can be assigned, most pointedly no inflection point, especially one like the current year.

As you examine the plethora of forecasts, predictions and prophecies espoused by pundits of all sorts at the beginning of each year, don’t think you missing something if you can’t see, smell, touch, hear (or taste?) the trend on the list inside of your organization. Chances are, the trend is worth discussing, but the timeline is more wishful thinking than data-driven forecast. The idea may not yet be rearing its head inside your organization, or perhaps it is doing so as a whisper in corners, as a weak signal in the background noise.

Eventually the annual review will go away, but it isn’t going to happen any time soon. The point of the forecast has been made, however, because we are talking about it and awareness that their might just be a different way to assess and reward people is worthy of dialog—and it is one step along the path toward evolving new review practices.

Daniel W. Rasmus

Daniel W. Rasmus, Founder and Principal Analyst of Serious Insights, is an internationally recognized speaker on the future of work and education. He is the author of several books, including Listening to the Future and Management by Design.

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