APPRAISALS - 20.08.2018

How relevant is the traditional appraisal system?

How are appraisals changing?

Annual performance appraisals, also known as performance reviews, have come under great scrutiny over recent years with a move towards continuous feedback. With the realisation that it is a constant battle to encourage managers to carry out what are perceived to be onerous, time consuming and in many cases tick box exercises, the purpose and value of the annual appraisal has been significantly questioned. In many cases, this is because the appraisal has been treated as a stand-alone performance management tool, with no other discussions designed to support the process at any other time of the year. This has resulted in their effectiveness and relevance being very limited. The conversation has moved from being one-way to two-way, with performance and goals being a collaborative process between a manager and an employee.

Holistic. However, where the annual appraisal has been implemented as part of a holistic performance management programme, appraisals are still considered to play a key role in driving and managing performance.

Agile working and continuous feedback

Appraisals were associated with excessive paperwork and relied heavily on the employee and manager keeping notes of their performance activities over the previous twelve months. In reality, what happens in many annual performance reviews is that the activities in the preceding three months are the ones that are discussed the most and therefore heavily influence the outcome of the review.

As more and more organisations are adapting to a more agile way of working to adapt to changes, they are redesigning performance management to adapt to this style. This includes responsive goal management to address changing business needs, through continuous feedback and the re-evaluation of goals throughout the year.

Pro advice. Goals should be set, adjusted and reviewed in a timely manner. A review of goals should not just be limited to when it is time to have a performance discussion.

Collaboration

There has been a shift to open dialogue with employees being required to self-reflect on their own performance and not solely rely on the manager’s opinion. Evaluating performance has moved from focusing just on an employee’s individual achievement to their overall contribution to a team and the organisational goals. An open exchange and dialogue builds trust and engagement, helping to reflect on areas that require development and improvement. With an open discussion employees feel supported and fairly treated and respond better to reviews, increasing their overall performance.

Continuous learning and development

With the need to frequently adapt it is critical that a manager and employee meet regularly to identify skills gaps and what learning is required to support an individual in their role. By providing employees with the development they need in a timely manner, the business is supported through objectives being addressed quickly. Research confirms that a strength-based approach rather than focusing on an employee’s weaknesses is more effective in motivating people.

Organisational objectives

Effective management ensures that individual goals are aligned to the organisational goals and business strategy. Providing feedback and managing employee performance in real time enables organisations to be more agile and proactive. Ensuring both performance and development goals are aligned to the organisation strategy creates a learning environment in which individuals and the organisation can adapt seamlessly and quickly, to be as dynamic as the business environment and empowering the individual.

Managers

A major contributor to annual performance appraisals and feedback being avoided or not conducted effectively is due to the skills and capability of the manager to address sometimes difficult conversations about performance. Therefore, to drive performance on a continuous basis it is important to upskill managers in the ability to give effective feedback, both for positive reinforcement and for improvement. This is particularly important when the issues of performance are more related to behaviour and attitude than skill and competence. Coaching managers how to be comfortable engaging with direct reports and entering discussions with them is critical. They need to ask good questions and know when to use open or closed questions. Managers should be active listeners and offer constructive feedback.

Pay and performance

Performance related pay is a way of linking salary progression to an individual’s performance. More recently, organisations have moved towards how well an individual has contributed to the business as a whole. In essence, they are assessed and rewarded on not just what they do but how they do it. This is where it’s important for managers to be provided with the skills to give feedback when individuals are not carrying out their duties in the way that aligns with the organisational values and culture.

Rating system

Historically, employee’s performance was ranked on a scale. Many organisations are moving away from this as it tends to make managers focus on the scoring rather than on the discussion about an employee’s performance.

Pro advice 1. When using rating systems for pay or promotion decisions consider redesigning the system to be more straightforward with the emphasis on qualitative justification.

Pro advice 2. Study high-performing individuals, teams and leaders to incorporate their practices into the rest of the organisation.

Pro advice 3. Identify other organisations in your industry or area that are leading in performance management. Talk to your peers about their challenges and opportunities in performance management.

What should be discussed?

With the move towards continuous feedback, many organisations are having regular performance conversations. These could by monthly, bi-monthly or weekly. The conversation should be an open discussion, exchanging feedback and reflecting on areas of development and improvement. The CIPD advises the following topics to be discussed:

• how well the employee has performed and what they have achieved since the last meeting
• factors that have helped or hindered performance and how employees can become more effective now and in the future
• what practical support and learning or development will help the employee
• how the employee’s current role and longer-term career may be developed
• objectives for the next review period and a plan for how they can be met.

Assessing performance

Seeking input from a wide range of stakeholders such as peers provides a broader view of the individual’s performance, reducing the reliance on the manager’s perception alone and can enhance the individual’s sense of fairness and equity.

Pro advice. Many performance issues arise from individuals being in the wrong job, maybe feeling bored, not challenged or that they do not have the skills or desire to perform the duties required. Having regular contact with individuals to assess and understand them, ensures that issues are picked up in a timely manner with greater opportunity to address the situation.