The Evolution of Performance Appraisals
Performance appraisals are often viewed as a tedious task that both managers and their direct reports despise. Cumbersome and over complicate performance appraisals process have been the major contributor to that perception for many. Not to mention the amount of paperwork it creates and that in many cases, it doesn’t really serve a genuine purpose in achieving change.
It begs the questions of whether performance appraisal as we know it, is a thing of the past. Recent figures from the U.S. indicate a drop of more than a third of companies moving away from the performance appraisal process in search to more suitable alternatives. The most common argument against annual performance appraisals is that the focus is for what was done in the last 12 months. Managers and their direct reports alike argue that the feedback should be timely and frequent for change to be effectuated.
This seems like a logical argument, and it has prompted a move towards more development focussed conversations between managers and their direct reports. In turn this allows for corrective feedback to be provided within an appropriate timeframe and promotes agility in responding to changing business pressures. Afterall what’s more important, holding someone accountable for what they did or didn’t do over the last 12 months or providing them with timely feedback that will enable improvement? Its obvious that the latter is the most significant endeavour and where businesses ought to focus their efforts on.
It is important to acknowledge that whilst regular and timely feedback needs to be provided, the organisational goals also need to be aligned to individual objectives in order to get the best outcomes possible. Furthermore, annual performance appraisals do offer an objective review of a team member’s performance over a longer period of time and can foster more merit-based raises. On the same token, it enables organisation to identify poor performers and provides a platform for discussing solutions.
A more holistic approach would be to utilise a hybrid version of the traditional performance appraisal model and couple it with regular and timely feedback underpinned with ratings on different key indicators of desired performance and behaviours. Technology companies such as Microsoft and IBM have been early adopters of this hybrid model and have moved away from the more traditional once a year appraisal. Providing team members the opportunity to improve through regular and timely feedback as opposed to punitive action at the end of a 12 month period encapsulated in a annual performance review process doesn’t seem to work.
This isn’t a one size fits all type of approach and in some industries or functions such as sales it is logical to highlight accountability and motivate with financial rewards. Circumstances need to be considered and in most cases the middle ground approach between old and new is potentially best suited. Sticking to the traditional once a year performance appraisal on its own really doesn’t seem like the way forward anymore. If you are still not convinced, consider why annual performance appraisals are so widely despised by so many.
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