In an era where agile, responsive management styles are not just preferred but required, the traditional annual appraisal seems increasingly out of step with modern business practices. Do you agree?
Originally conceived as a structured means to evaluate and plan the performance and development of employees, annual appraisals are now often viewed as outdated, rigid, and less effective. With the shift towards more dynamic, continuous feedback mechanisms, it's time to reassess the value and impact of these yearly rituals.
Our Senior Partner, Nicola Blackmore, shares her thoughts on why it’s time to ditch annual appraisals, and we'd love to know if these are still taking place in your business?
Why do most organisations have an annual appraisal system?
Depending on what you read, the concept of the annual appraisal has been around since the early 1900s and has grown in ‘popularity’ since the 1950s. I use the word ‘popularity’ in the sense of being used more rather than being enjoyed…because it certainly isn’t a popular activity in any organisation I have ever worked for or with!
Over the past 70 years, the annual appraisal has evolved and adapted, but its essence is about finding a way to discuss and measure the performance of employees and plan the future, both short and long term.
The concept is sound and useful for almost all organisations however, the execution doesn’t always hit the spot. I think it is fair to say that many organisations hold annual appraisals because of tradition and habit rather than for a strategic purpose and they are seen as an “HR process” rather than a useful performance management tool.
What are the downsides to annual appraisals?
Unfortunately, when annual appraisals are just seen as an HR process (more forms to fill out and boxes to tick) then there can be many downsides. The things I see and hear most often are:
The process is completed in isolation and ‘submitted’ for signing rather than spending time having a conversation and agreeing together what will be written. (This probably happens more often than most people would admit).
What is reviewed in any level of detail is only the last few weeks or months rather than the whole year – because that is what we can remember.
Employees and managers feel that the preparation required and the time that is needed to plan the meeting is too great, so they often don’t do any preparation at all and just attend the meeting and hope it is over quickly!
So much time is spent looking back at what happened across the past year that there isn’t enough time to focus on the plans for the year ahead and creating good quality objectives and career planning.
The form gets submitted and is then forgotten about for 11 months until the next email comes around titled “It’s appraisal time again!”. So, any plans and objectives that were agreed probably haven’t been worked on or achieved.
If any (or more sadly all) of these things happen, then the appraisal process isn’t having any positive impact at all and is probably getting in the way of effective performance.
What is the alternative to annual appraisals?
In my view, the best alternative to annual appraisals is to stop doing them annually. Stop making them a process that needs to happen in a specific four or six week window of the corporate calendar and instead create a culture of regular constructive performance conversations that happen continuously.
Encourage managers to have regular reviews with their team members throughout the year that focus on looking back and looking forward every time rather than doing it once a year. Time should be spent in each of these discussions setting stretching objectives and goals for the coming weeks (which will be reviewed at the following meeting) and there should be a focus on reflecting on the successes and learnings to carry forward into the next period.
There would be many benefits to approaching reviews in this way. Firstly, managers and employees would be having more quality conversations, more regularly so you can expect an increase in engagement and value of relationships. Secondly, the objectives being set are likely to be more relevant and reviewing more quickly, so will likely drive higher productivity and the learning from any failures or struggles will be reviewed more promptly too, so should have a greater chance of impacting future performance more effectively.
Thirdly, by removing it as an ‘HR process’ you would save time in chasing and reminding everyone to get it done (we shouldn’t underestimate how much time that will save!)
What steps can organisations take to change this process?
If you are wondering how to do this in your organisation. I suggest you focus on these three areas to get you on the right track…
Make sure all your managers are clear, confident and skilled in how to have high quality conversations and deliver feedback that really lands and is actionable.
Remove as much red tape and paperwork as possible. The more people have to write down, the less they tend to do! So, think carefully about what you need written and tracked (if anything) and make it as easy as possible for this to be captured and accessed. For example, a simple to use app that could capture key points and is easy to access in and out of the review meetings.
Move the ‘ownership’ and mindset of this process away from the HR team. Make sure that everyone is clear that it is about having regular great quality conversations, not completing forms for HR.
As we move away from annual appraisals towards more continuous and engaging performance management strategies, Blue Gnu Consulting is at the forefront, guiding teams and leaders through this transition.
Our suite of tools and secret sauce, empowers leaders and teams to cultivate environments where continuous improvement, motivation, and engagement are part of the everyday culture. Partner with us and transform the way your organisation approaches performance management, creating a more agile, informed, and motivated team.
Article written by Senior Partner, Nicola Blackmore - May 2024
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