There’s change afoot in the world of performance management, with a recent report from PwC suggesting at least two-thirds of companies are rethinking their appraisal processes. The firm’s research found that organisations were shifting their focus towards continuous feedback, rather than the traditional annual review, with 1 in 20 planning to abandon formal evaluations altogether. Several high profile employers have indeed already gone down this route – Accenture, Microsoft and Deloitte, to name a few.
A number of factors appear to be driving this change of emphasis. Advances in technology have made it much easier to gather performance-related data and provide the kind of real-time feedback that can make a measurable difference to productivity. At the same time, Generation Y employees are now playing a pivotal role in the workplace and bringing with them a thirst for instant praise, on-going development and rapid career progression.
It’s clear from the research that this move towards continuous feedback is welcomed by employees. The majority of staff questioned for the survey said they found appraisals beneficial in helping them understand how well they were working and what they needed to do to progress their careers. Sixty-eight per cent said they would like to have appraisals more frequently, provided the conversations were well-thought through rather than rushed and formulaic.
So what can you, as an employer or individual manager, do to make sure your appraisal system is meaningful for your people as well as effectual for the business?
1. Make feedback an ongoing process
Feedback is for life, not just for Christmas (or whenever the annual performance review comes around). Make sure you give feedback to your team on a regular basis, outside of the formal appraisal process. Often, feedback is most impactful when it’s of the moment – immediate praise for a job well done or just-in-time guidance about how a project could be tackled more effectively. By the time the annual review arrives, the excellent work has often been forgotten or the lesson has been learnt too late and mistakes have been replicated. It’s important to recognise that most employees are hungry for constructive feedback and regular coaching. After all, if you don’t tell them how they are doing, how else will they know? Research from Blessing White found that employees that are coached are more positive about performance reviews – and have a better perception about their fairness and accuracy.
2. Know what you want to achieve
One of the problems is that all too often, performance conversations are rushed, box-ticking affairs, with no clear purpose which leave everyone feeling dissatisfied. If appraisals are to have the positive outcomes that everyone is looking for, employee expectations need to be appropriately set, and reviewing managers have a clear view of what it is they want to achieve – not just during the review but afterwards too.
Technology, can of course, do much to help managers. Integrated HR systems and Performance management software reduces the admin overhead and provides easy access to information to support the performance conversation, giving managers more time think about the messages they want to convey and the areas they need to explore. They also make agreed actions and objectives more visible – so it’s easier to ensure that what’s discussed doesn’t get filed and forgotten.
3. Make it a dialogue, not a diatribe
A conversation about performance should be a two-way street. It’s a great opportunity for the individual to understand better what their manager really wants from them – and for the manager to find out what is either helping or hindering good performance in their team. An open, honest conversation may reveal hidden skills or aspirations an employee hasn’t previously voiced. Equally, it may shed light on the reasons behind under-par performance – inadequate resources or difficult colleagues, for example. Make sure performance conversations, whether formal or informal, are something both parties look forward, rather than regarding them as akin to a visit to the dentist.
It’s important to make sure you don’t fall into the trap of giving the best ratings to people who shout the loudest. Recent research from insight and technology company CEB suggests that traditional performance appraisals often favour ‘self-promoting’ employees and unfairly under-rate more modest people. In an era of collaborative working, it can be difficult to pinpoint exactly what contribution individuals are making. Make sure you take the time to really understand what people are doing and how they are adding value, so you can have a fair and productive conversation.
4. Focus on the positive
Another danger is to focus on what’s gone pear-shaped, been done badly or didn’t quite come up to expectations. While constructive criticism is appreciated by some, there is a danger that it leaves people feeling demotivated and down-hearted – especially if the issue hasn’t been raised before. They feel they have worked hard and given it their best, but still haven’t managed to make the mark. Poor performance or critical skills gaps cannot, of course, be ignored,but you are more likely to see positive change if you focus on what is going well and how people can do more of it. A good performance conversation will explore how employees can make the best use of their strengths and what kind of development will really help them move forward. People need to know their manager is noticing all the good things they’ve done and thinking about how to build on their talents, rather than trying to ‘catch them out’ on areas of weakness or nit-picking about small, insignificant mistakes.
5. Look ahead
In a fast-changing business environment, it simply doesn’t make sense to centre performance conversations on the past. What was a business priority a year ago probably isn’t a priority now. It’s much more useful to focus appraisals or reviews on the future. What perhaps previously untapped skills does an employee have that will help the team achieve its objectives? How can people quickly develop new competencies that will help to move the business forward? Regular performance conversations, both formal and informal, are a great way to help employees make sense of the changes that are going on around them and to keep them focused on what matters right now.
If you’re at the helm of the business, don’t assume that your managers will automatically know how to give feedback effectively – it’s a task many find difficult and need support with.
One action to take this week: When was the last time you sat down with your direct reports and had an informal performance conversation? Make time this week to talk to your team and catch up on how they’re doing.
You might be interested in reading our guide to running a great performance review.