It’s Time To Rethink The Annual Appraisal

Does your business run annual appraisals?  

If not, you might be feeling a bit guilty about it – after all, it’s a long-held wisdom that this is the best practice way to manage....

But things are changing, starting with the larger companies. 

Professional services giant Accenture announced recently that it’s scrapping annual appraisals, joining the likes of Microsoft, Apple, Gap and Expedia. Start-ups such as Google, Facebook and Netflix have bypassed them entirely.

Why?  The mood within many larger companies is that too often the annual appraisal had deteriorated into a ritualised, bureaucratic process, a distraction from the regular feedback conversations that managers should be having with their people.  It was hard to justify whether the time and effort involved really did improve performance management. All in all, the annual appraisal has been seen as just one of a number of processes encumbering organisations, without adding enough value.

Appraisals aren’t all bad. In a recent PwC survey, two-thirds of employees said they helped them understand how their performance shaped up and 48 per cent said they enabled them to think about their wider career. Where appraisals focus on coaching and not judging, people found them a useful way of knowing where they stand and letting them know periodically whether they’re on track.

Of course, those companies ditching annual appraisals aren’t abandoning performance management. Instead they intend to concentrate on developing practices that create a continuous feedback culture, with regular catch-ups concentrating on development.  By pointing out problems as they arise, employees have the opportunity to change their behaviour in a way that makes an immediate difference.  And because it happens in the here-and-now, continuous feedback is more likely to be honest and fair.

If you're a smaller company, what should you do?

Keep your eye on the bigger picture: in the context of your particular business, where do you need to be developing people and where would improving individual performance make the biggest difference? And how: what's the best fit in terms of practices and processes? 

Start with broad principles that are sensitive to your people.  If you want your staff to achieve great things, you’ll have to ensure that you’re giving them the right kind of support.   So, what will enable them to do the best job that they can and give them the opportunity to develop?  

Do your managers have the skills and encouragement for regular connection, engagement and feedback conversations with their people?

Are you able to have deeper periodic discussions with your managers about their development and growth opportunities? – so that they’re supported in sharpening their skills and progressing with you.

Is yours a company where people can have honest conversations and feel comfortable speaking their minds? Or do your managers think their job is telling people what to do?

"The future has to be a lot less about control, and a lot more about enablement." -Peter Cheese, Chief Executive, CIPD

It may be time to update your approach, and consider how you can make performance management really work in your business.  Need a little help with getting off to a great start? Get in touch. Email enquiries@thehr.co.uk, tel 07884 475303.

We’d be happy to support you in improving performance within your organization – and we’re experts on creating traditional appraisal schemes tailored to your business!