There has been much talk about the demise of the annual appraisal with companies like Accenture, Microsoft and GE publicly consigning it to history. So what does this mean for the future of performance appraisal?
There has been much talk about the demise of the annual appraisal with companies like Accenture, Microsoft and GE publicly consigning it to history.
There’s little doubt that traditional performance management programmes often don’t deliver the goods. In a Towers Watson survey, less than half of employers felt they were effective, while 75 per cent of staff dubbed them unfair.
Part of the problem is that in an increasingly agile business world, a once-a-year conversation just doesn’t cut it. By the time the next annual appraisal comes around, markets will have shifted, priorities will have changed and a whole new set of skills might be needed.
In a tough competitive climate, however, the challenges of getting employees performing at peak and fulfilling their potential is more important than ever. So if conventional approaches to performance management aren’t working, what should organisations be doing to make sure people are achieving their ‘personal best’?
A new approach
Companies like Deloitte and Adobe have been leading a shift towards continuous performance management. What this means in practice, is managers having an on-going dialogue with their teams, giving feedback in the moment and holding regular ‘check-in’ conversations with their people.
This more fluid approach allows for goals to be reviewed as situations change and ensures people are crystal clear about what’s important for them to be doing right now. It means that small problems can be nipped in the bud before they turn into big issues and allows development needs to be addressed quickly.
Accenture, for example, has moved away from its once-a-year evaluation process to a system where managers give timely feedback to their people on an on-going basis following assignments.
Deloitte, meanwhile, has reportedly cut down on the time-consuming paperwork that typifies many performance management processes by using only four simple questions in its reviews.
Time will tell whether this shift to a continual focus on performance will catch on more widely – and how successful it will be. But companies considering ditching the annual appraisal would be wise to consider two key issues:
Line manager capability
The first is just how well-equipped their managers are to engage in meaningful conversations about performance with their teams. Giving (and indeed receiving) feedback is a task many managers are uncomfortable with and it’s dangerous to make the assumption they will automatically know how to do it well.
If any performance management process – old or new style – is to be successful, it needs to be underpinned by training and support designed to help managers have positive, future-focused conversations. It’s the difference between asking people how they are getting on and asking them what you as a manager can do to help them make the best use of their strengths and overcome any road-blocks they may be facing.
The second issue is whether the business is fully exploiting the sophisticated technology that is now available to support performance management processes.
The latest generation systems can nudge managers when check-ins are due and provide a central place where feedback, information about training and resources for managers (such as prompts to help guide their discussions) can be housed.
Managers can log just-in-time feedback on an employee’s profile, while employees themselves can self-assess against their goals and make notes to inform future discussions. Some systems even allow for ‘crowd-sourced’ feedback, giving colleagues or peers from other departments the opportunity to have an input.
Of course the technology can’t have the conversations for you. But combined with proper support for managers, it can do much to generate the data the business needs to inform decisions about succession and reward, bring transparency and consistency to processes and boost the overall effectiveness of performance management initiatives.
Wade Macdonald’s ‘Future of HR’ series aims to explore some of the real challenges and opportunities facing the world of HR as working practices evolve. Stay tuned for further insight.