An inescapable and widely dreaded fact of life for people employed in the financial industry is the annual review. Unlike the way this process might have worked a few decades ago, and still does in most other industries, it’s not a simple matter of sitting down with your manager at the end of the year for a casual discussion of the work you’ve done.
A pat on the back for your accomplishments in the previous twelve months, and constructive criticism on your general areas of weakness and specific failures? On the contrary, at large banks the annual review now consists of a ridiculously complex set of actions and analyses potentially involving many people and sometimes taking literally months.
It’s clearly a good thing for both employers and employees in the industry to have some kind of annual review mechanism. For a firm, it’s an element of the banking world’s endlessly touted focus on “meritocracy”, an attempt at an objective measure of your performance to guarantee that you’re judged solely on the quality of your work, which in turn ensures that the firm retains only the “best and brightest”.
It also provides a tangible paper trail to be used as supporting evidence if you’re sacked and decide to fight that decision. (“You’ve had consistently low scores on your reviews for the past three years - an open-and-shut case!”)
For you, the employee, an annual review serves the purpose of formally acknowledging your achievements and helping you to recognise and correct your faults. In addition — and, not surprisingly, more important to most people — the results are used to determine what the discretionary portion of your salary (misleadingly referred to as your “bonus”) will be, and whether or not you’ll get the nod when you become eligible for promotion.
The importance of both those things cannot be overstated: your bonus can comprise a significant portion of your total compensation, and your title is a very public recognition of your importance to the firm; it, in turn, also helps determine what your compensation will be. These reasonable motives notwithstanding, it’s not clear that the thousand-tentacled procedure in place at most banks is much better than a simple one-on-one review from your manager would be.
Let's see how deep this rabbit hole goes
Here’s how the process works: there will usually be an online evaluation form with such vaguely defined categories as “Operational Excellence”, “Business Success”, “Franchise Building”, and, for technology people, “Technical Knowledge”.
For each of these, your manager will write a free-form summary of how you performed in the previous year, and also give you a score (from 0 to 5, say) on a number of more precise sub-categories: how good you are at “building relationships”, delivering on your commitments to your users, familiarising yourself with the technology tools available at the firm so as not to reinvent the wheel, and (if you yourself are a manager) leading people.
The numeric scores are averaged to give you a final score, and, while the written portion of the review is taken note of, that final number is all-important. It determines everything from the size of your bonus (which might turn out to be zero) to whether you’ll be promoted or whether you’ll be placed on probation and become a candidate for termination if you don’t start showing some improvement.
But it gets much more complicated. At most financial firms, several coworkers besides your immediate manager will do a similar evaluation of you. This number can get big, especially for higher-ranking employees, and it’s not unusual to have ten or more people — peers, more senior colleagues, and more junior colleagues — reviewing you. At some firms the numeric scores you get from all your reviewers are used to compute your final score, and at others the reviews and ratings you get from the “additional reviewers” are mainly there to give a more complete picture to your manager, who is still solely responsible for your official writeup and numeric rating.
(Your manager may also choose to select significant comments, positive or negative, from the other reviewers and include them in the text portion of your final writeup.)
You are almost always required to go through this same process for yourself, and again, depending on the firm, the number you come up with may or may not be used in computing your final score. (I was once told by a manager that my score was brought down by my own middling ranking of myself, an attempt at anti-egomania that blew up in my face.)
You generally select your “additional reviewers” yourself, but it’s not uncommon for your manager to add a few people to your reviewer pool, some of whom you might not really want reviewing you. To be fair, I’ve rarely seen cases of outright vindictiveness, but it can still be frightening knowing that your arch-enemy is evaluating you, and possibly contributing to your final score.
I can’t be absolutely certain, but I’m pretty sure I was once a victim of a fairly senior manager who simply didn’t like me, or in any event thought I was utterly useless. She gave me the lowest scores I’d ever seen anyone get, and though in this case they were not baked into my calculated final number, my manager was forced to take her devastating review into account when he came up with that number.
While the reviews you receive from everyone but your direct manager are kept anonymous by the system where they’re entered, it’s sometimes easy to tell who was responsible for a particular review. This can be particularly worrisome when you’re reviewing your own manager.
A friend of mine was once sacked shortly after giving his manager a very negative review, and he swore that this was in retaliation for what he’d said. I asked how that could possibly be, given the system’s anonymity. He pointed out that he was the only native English speaker in his group, so it would have been glaringly obvious which of the team’s comments had come from him.