Transforming performance management – is the traditional employee appraisal dead?
For most employees, the annual appraisal process starts with a reminder from Human Resources prompting managers and staff to dust off last year’s forms and start thinking about their performance over the last 12 months. It’s a model that’s been in place for years, but how effective is it for monitoring and increasing standards of employee performance in today’s business environment?
A study by Deloitte in 20151 showed that 82 percent of companies reported that performance evaluations were not worth the time spent on them. It found that companies recognised the need to align goals, provide feedback and coach for performance as a “real-time, continuous, and multidirectional” process.
The traditional annual appraisal does not meet this need. It is not timely enough to be meaningful and is often backward focussed. Carrying out a formal annual appraisal is also time and resource intensive as managers are usually required to review all their staff in a short period of time. This can often lead to a lack of manager buy-in to the appraisal process as it is seen as a requirement that has to be met, rather than time spent invested in staff and the business.
Agile goal setting
A more effective way to manage and review performance is to hold regular catch-ups with staff throughout the year. Having these discussions with staff in real time results in more accurate reviews, coaching and feedback, which is far more valuable than year-end conversations. Regular catch-ups also give managers the opportunity to review and refresh goals in response to feedback or changes in the business (known as “agile goal setting”) which helps drive employee, and organisational, performance.
Regular meetings also help to clarify what is expected from staff and managers and should explore how each person can excel in their performance. This can open up timely conversations about what coaching or training may be needed to ensure staff are continuously learning and progressing, rather than waiting to have these conversations at the end of the year.
Implementing a new agile and regular appraisal system will still need to have some structure to ensure that staff are treated fairly and legally. Meetings discussing performance should be documented and a consistent approach will need to be followed by all managers throughout the business. A failure to do so is likely to lead to challenges from employees who feel they have been treated unfairly, particularly if they have missed out on a pay rise or bonus as a result of their performance review.
Top tips for optimising performance without annual appraisals:
- Do not wait until the end of the year to raise concerns about performance. These should be raised with staff in real-time to ensure they are aware of the problem and support is provided to help them improve.
- Ensure managers are given appropriate training to ensure they manage staff effectively, consistently and fairly.
- Consider using technology and software to help managers keep on top of performance catch-ups, for example, using apps and calendar invites to diarise meetings.
- Document catch-ups with staff to ensure you have a record of performance discussions. This doesn’t have to be long, an email to the employee briefly setting out what was discussed and documenting the reason for any changes in objectives and goals is sufficient.
- If formal performance management is required, regular and documented discussions will greatly help the business to achieve a fair process and minimise the risk of an unfair dismissal claim.
For more information, please contact Abigail Maino, Associate - Employment.
Published: 6 Jul 2018