Annual appraisals versus regular reviews
Over the last 15-20 years, there have been a number of fundamental corporate social challenges and changes in the way organisations work.
This includes how we manage and review staff through appraisals.
Back in 2012 Adobe announced they were scrapping annual appraisals in favour of regular reviews. This approach to a new evaluation system was considered innovative and exciting due to a lack of results on annual appraisals.
Microsoft followed suit and got rid of annual appraisals in 2014. They were shortly followed by other global organisations such as Deloitte, Accenture and General Electric.
Finally, evidence shows that organisations are waking up to what many of us in HR had instinctively known for years:
“That appraisals don’t actually improve employee performance”.
Regular, future-focused conversations and feedback with staff improve performance and engagement with staff.
Managers and staff usually see the annual appraisals as a ‘tick box’ exercise and a waste of time.
The importance of regular, meaningful performance and development discussions is key when designing a performance management framework.
Furthermore, as an ex HR-Manager and freelance consultant, I have worked with a variety of performance management systems over the years.
Similarly, I have seen many examples of poorly designed appraisal systems, likewise, it normally fails because it is fundamental to ensure staff feel valued and listened to.
Certainly, It is more efficient to carry out regular reviews instead of having one appraisal per year.
For that reason, companies of all sizes are shifting away from annual appraisals to more regular reviews and frequent feedback.
The organisations have to redesign the performance management process. According to Deloitte, it is now a high priority for 79% of executives.
What impact does this have?
Every day even more organisations are embracing this new approach,
The focus on how to make a performance dialogue more productive is the key to success.
To achieve this they have to:
- Develop an appraisal framework to ensure the focus is on high-quality discussions, this includes giving constructive and motivational feedback.
- Provide employees and managers with an understanding of this framework in order that the high-quality discussions and feedback are effectively delivered.
- The performance management framework should encourage future-focused, developmental dialogue not backwards looking dialogue.
- When qualitative feedback is supporting the reviews, normally generates more impact and furthermore, results.
- Minimise form filling and bureaucracy and keep the paperwork or process short and simple (KISS)
- Provide training for staff on how to evidence performance and complete the framework ready for discussion
- Separate performance measurement from performance improvement conversations and feedback
- Provide training for managers in everyday coaching skill
- It appears to be simple, but the application of an effective system can be a little tricky and the results even more complicated.
In my experience questions and issues that organisations are facing are:
- What would they need to do to get managers to engage in more regular conversations?
- How would they make the conversations meaningful?
- What impact would this have on the salary review and bonus system?
- How will they be able to gauge the success or failure of regular reviews and feedback?
- What would they need to put in place to get staff to take ownership of their own development?
- How will they get buy-in from the managers to take ownership of the process and not rely on HR?
Is your organisation using ‘annual appraisals’ as a vehicle to manage and review performance?
Is it adding value or providing effective results? Take an action to change the process.
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