Many experts have brought to light how ineffective annual performance reviews can be. A few companies have even developed solutions to this common human resources issue. 

Yet the problem remains: What's the best way to let your people know how they're performing?

Maybe there's another way to look at the problem. 

Forget the Employee: Put the Team First

Perhaps it's time to stop reviewing individuals based on individual goals. A better idea, suggests Fortune 100 senior executive David Silverman on strategy + business, is to "evaluate departments against their goals, with managers included. Then judge higher-level executives by the aggregate performance of the multiple teams that comprise their units."

It's a provocative notion. But how would it work in practice?

It's not rocket science. Multiple methods already exist for measuring and evaluating work teams. Whichever methods you choose, here are two facets you'll need to nail down:

Decide the performance categories. Or, if you'll forgive our lingo: Decide what the Key Performance Indicators (KPIs) are for the team. For a sales team, for example, the KPIs might include lead response time and the usage rate of marketing collateral. (Salesforce.com's blog has seven KPIs for sales teams.)

Include a self-evaluation component. A traditional part of many individual performance reviews is the self-evaluation, in which an employee grades her own performance (and then compares her assessment to her supervisor's). For teams, you can repliate this self-evaluation piece by using a tool like Survey Monkey, notes the Harvard Business Review blog. 

The point is, you'll need a mechanism through which team members can give themselves collective grades in multiple KPIs or performance categories. And when a collective grade is low, you'll know where the team needs to improve. Better still, you'll have evidence that the team members themselves believe that the category or KPI needs improvement. It won't just be the subjective opinion of a lone manager.