Future of Performance Appraisals
Your company has decided to do away with annual performance appraisals, now what? What are you replacing them with? Whatever it is it needs to be meaningful.
Where is the structure? What will you refer to when the time comes for performance management or redundancy? From a legal perspective the requirement to have evidence to confirm how an employee is performing can be an integral part of any unfair dismissal claim.
We have been discussing this in the Peach office looking from a HR perspective as well as the legal angle. Accenture announced last year that they were scrapping annual appraisals. Hooray! I hear managers cry. However, this was the headline but looking further in to it they are still initiating “continuous feedback”.
Annual Performance Appraisals
Appraisal schemes have been around a long time and can be seen as a painstaking process for managers, it is rare that they have bought into the process and can be a long drawn out task. Appraisals can also be seen as a “HR” system that they impose on to managers where employees and managers can’t see any value. A common bias in annual performance appraisals is the Recency Effect, whereby ratings are influenced by the most recent behaviour ignoring the commonly demonstrated behaviours during the entire appraisal period.
Annual appraisals can be stressful for all sides due to the formality of the situation. If not dealt with correctly some employees can be surprised with the feedback they have received from their manager and likewise the manager may have not realised that their employee may be looking at developing in another area of the business or that they are unhappy in their role.
However, that being said, annual appraisals are a convenient way of rating employees which can then help with reviewing pay, identifying best and poor performers. They offer structure to managers and security that there is a process and system they can fall back on. Sometimes it is the only chance where an employee and manager meet and some employees look forward to this opportunity.
Continuous Feedback
Employees are looking for instantaneous feedback, which mirrors our everyday life now where information is immediately available. Businesses are responding to this and reviewing their systems to meet the needs of today’s worker. Some organisations have developed apps that enables on the spot feedback from anyone within the business. This reflects that this way of performance managing employees happens at the right time and can be more positive and future orientated. Other businesses have adopted monthly pulse checks which look at what an employee has achieved in that month, what they intend to achieve, any improvements to be made and what support is needed.
As this method deals with the here and now it enables goals and objectives to be amended if needs be rather than waiting 12 months, whereby those goals may not be relevant. However, there may be a negative aspect to this as there can be less emphasis on long term goal objectives.
Giving employees regular feedback means it is more reliable, relatable and relevant. Employees can therefore immediately change something if it is not working or feel the praise and recognition increasing their engagement to the business.
To enable continuous feedback to work managers need to be trained and have the right skills on how to do this, for example coaching.
However, one of the most common reasons for managers not being able complete annual appraisals is that they don’t have time. So asking managers to have more regular conversations with their employees may actually be more difficult to carry out. It may be seen as more work for them. This is where your performance management strategy needs to be compatible and bespoke to your business. One-size definitely does not fit all!
Future
In my experience annual appraisals tend to be delayed, up to several months therefore becoming more and more less relevant, bordering on meaningless. This then has an opposite effect on what it is intended to have. Therefore, a change to reflect to where we are today is long overdue.
If you are looking at changing your performance appraisal process the organisation needs to be ready for a different approach. Look at ways to enable your business to embrace a positive feedback culture where communication is open.
However, no annual appraisals process is not the opportunity for managers to devolve their management duties. It is about adopting the positives from both the annual appraisal process and the continuous feedback process. There is still a place for annual goal setting.
You may want to adopt regular feedback/pulse checks to provide immediate feedback which then can feed into a brief annual catch up. The annual meet will be easier for managers as they have the information already and it is a case of summarising and setting long term goals and objectives. Think about your processes and take advantage of the digital technology that is around today.
Whatever you decide it should be simple, have the engagement of the leaders as well as your managers and any support and guidance should be offered and available.
If you are thinking of moving from annual performance process to continuous feedback process or looking at revamping your performance management system contact one of our HR Specialists on 0161 478 3800 or hello@peachlaw.co.uk who can advise and guide you on the next steps.
