Better Performance Appraisals

How do you view performance reviews? Many employees and their managers dread them in equal measure. Managers frequently complain that they take up too much of their valuable time (if they are done at all!) and actually, no one is really sure what the overall purpose of the appraisal system is.

If this is you… isn’t it about time you took a step back asked what are performance appraisals really about?

If your appraisal processes has remained unchanged for years, then here are a few questions you should ask about the approach to performance appraisals in your organisation.

First, what is the overall purpose of your appraisal system? If you are struggling to answer this very important question then its purpose is not clear. Chances are you are not alone and no one in your organisation can remember why the appraisal process was implemented in the first place.

Putting aside how you currently run your appraisals, ask yourself what your organisation wants its appraisals to achieve. The answer may be different in different organisations, but if you don’t know what you should achieve, you probably won’t achieve it!

For example, the purpose of some appraisals is to measure the contribution of employees to the financial growth of the organisation. Whilst for others the aim is to encourage open and honest dialogue between managers and their staff. And in others it is to map individual future career development in order to manage the talent pipeline.

Once you’re clear on the overall purpose of your appraisal, it will naturally follow that some approaches to reviewing your staff will support the achievement of your aims and some won’t.

For example, if the overall purpose of your appraisal is to encourage open and honest dialogue between team members and their line manager, then linking salary increases or a bonus scheme to the appraisal is unlikely to support the achievement of this aim. With such a system team members will inevitably want to ‘sell’ their achievements and performance in order to get the salary increase or the bonus, and their line manager might not want to be the person responsible for them not getting it!

If, however, the overall purpose of your appraisal is to encourage effective team work, then using some form of 360 degree feedback in the review may be useful.

And if your workforce, or certain business units within it, are largely made up of the so called millennial generation (defined as those born between 1980 and the mid 1990s), then a more informal appraisal approach may be more effective.

The next question to ask yourself is: does your approach to appraisals reflect the overall values and culture of your organisation? The culture of an organisation is often as important to its employees as their salary: company culture is known to have a significant impact on both recruitment and on staff retention rates.

This being the case, shouldn’t your company culture be reflected in your approach to appraisals?  So how comfortably does your appraisal process sit with what’s really important to your organisation? For example, the appraisal may focus on individual contributions, when your company ethos is all about working in teams.

Appraisals should, therefore, be seen as an opportunity to find out how employees feel about the culture of the organisation, how they contribute to it and how they actually demonstrate the organisation’s values.

The next question to ask is do you actively coach or train managers on how, when, and where to carry out an appraisal discussion?

If your line managers don’t understand the overall purpose of the appraisal, then they are not going to carry out the appraisals they run in a way which meets that purpose.

If you are trying to achieve open and honest dialogue, then you will need to actively encourage all managers to hold appraisal discussions in a way that is conducive to creating a relaxed and open conversation. For example, if your employees aren’t office based, perhaps their appraisals should be held off site, rather than at the company's offices.

The next question to ask is do you really know how your employees feel about the appraisal process?

Whatever your current approach to running an appraisal discussion, do you know how your staff really feel about it? If your staff dread appraisal discussions or see them as a form filling exercise and a waste of time then it’s clear something needs to change to make the appraisal fit for purpose.

If you do decide that a redesign of the appraisal is required, then why not involve your staff and get their input? This way it will be more relevant to them. However, if you do this then you must first ensure that your staff are clear on what you are trying to achieve (the overall purpose again!), otherwise you will not get meaningful input from them.

The next question to ask is do you need a formal appraisal system at all? Many organisations are asking themselves this question.

The traditional approach of annual or six-monthly formal appraisal discussions may be completely irrelevant within your organisation and not reflect the rhythms or cycles of your business.

It’s important to recognise that the answer to this question may not be the same for every part of your organisation. If this is the case, does it really matter if you don’t have a uniform approach across the whole company? It may well be more effective to have different approaches across the different business units or even across the categories of job roles. This might upset the HR department, but what is important is that every appraisal is effective and results focused.

Whatever type of appraisal process you end up with, you will still need to keep some sort of record of what is discussed at the meeting. This doesn’t have to be a formal ten page document – it could simply be an informal follow up email from the manager to the employee. Records of performance discussions are important as they enable you to demonstrate what’s been discussed should the need to refer back to it ever arise.

So the conclusion must be that there is no ‘one size fits all’ approach to performance appraisal design. What will work very well for one organisation may not work at all for another. However, it is worth taking a critical look at your current approach and asking the above questions, starting with the most important first question: ‘What’s the overall purpose of your appraisal?’ Because once that’s clear, then you’re already halfway there!

Spearhead can help with appraisal design and training. Simply contact us on 01608 644144.