What goes around, comes around. And what's coming around againis the reexamination of the performance review process.

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Towers Watson took a look at how the enterprise is handling thereview process these days, now that the economy has improved andfinding good talent is becoming ever more difficult.

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What Towers Watson found was that management is looking to pastperformance review advice to inform current practices.

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For years, consultants have said the annual review doesn't cut the mustard. Itbecomes a kind of check-that-box affair where the boss lays out thegood, the bad and the ugly about the employee's work, and theemployee sits there patiently waiting to hear how much the raisewill be.

The cutting edgethinkers today, Towers Watson said, are “replacing annualperformance review cycles with more frequent employeeand manager interactions, applying a more future-orienteddefinition of performance and potential, and implementing newtechnology.”

That, the theory runs, will keep both boss and worker more closely aligned ongetting the job done right, and will build a better relationship inthe process.

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Among the details turned up by the survey:

• 63% of North American companies say their performance managementprograms are not effective

• 74% say their managers and employees are dissatisfied with theprocess

• 50% say workers and managers don't spend enough time onperformance management

• 92% are going to keep doing them in one form or another

• 29% are either planning to or are considering eliminatingthem

• 50% said they have either changed or eliminated the annualperformance review cycle in favor of more frequent interactionsbetween employees and managers, or are planning or considering thischange

But will changing the process without changing the peopleinvolved work? Not necessarily. Check this out:

• 64% of respondents don't believe their managers and supervisorshave the necessary skills to conduct a decent performanceevaluation

• 56% report a lack of effective feedback

• 51% think managers don't have the time to do performancemanagement well

“For many organizations, performance management as we knowit today is not working. These programs haven't delivered on theirpromise to improve performance, and there are widespread signs offrustration among managers and employees,” said Laura Sejen, amanaging director in the Talent and Rewards practice at TowersWatson.

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“Employers recognize the importance of these programs and thatsignificant changes, not tweaks, are needed. That said, mostemployers believe scrapping performance management programs,including the use of performance ratings, is not the solution.”