If you’ve been reading the HR and business press recently, it’s easy to get the impression that performance reviews are fast becoming extinct (and any company still using them is living in the dark ages).
Much of the cover relates to major US companies that have dropped some of the more draconian approaches to performance reviews in favour of a more human and agile approach.
However, for most companies, performance reviews continue to provide value for a multitude of reasons. They improve the focus on company and personal goals; deliver the feedback many employees are looking for; hold managers to account for delivering against development and career promises; inform decisions about how to allocate resources; and provide the evidence needed to address performance issues.
Not abolition, but evolution
As a recent article in The Economist says, the reality is that companies aren’t abolishing performance management, but changing their approach to one that is better suited to the way that businesses have to operate today.
We see the same trends in the way we see our customers using Cezanne HR’s performance management software module. Annual appraisals are being replaced by more frequent reviews and discussions; a focus on past performance is shifting to an emphasis on future potential and development; ratings are more nuanced and greater effort is being made to remove the biases that often creep into performance reviews.
With Cezanne HR, companies are able to mix and match question and answer types, and use approaches, such as behavioural anchors, to support a more objective appraisal of core competencies, and to give employees the opportunity to showcase all of their achievements, so that managers don’t just focus on the one or two things where they are not living up to expectations.
Assurance and insurance
Companies have to make difficult decisions about how to use their resources, whether that’s investing in development or letting people go. In these situations, information gathered during the performance process help ensure that decisions are made on robust criteria, and not on, as The Economist puts it, “a management whim”.
Managing performance using online software makes it simpler to keep processes on track, and provides for much more effective reporting than would ever be possible using fragmented or paper-based forms. With integrated solutions, where the performance system is part of a more comprehensive HR solution, the view can be expanded take in training, absences, or work history, providing a more complete view of the factors that influence performance.
Interestingly, The Economist article concludes by warning against the “more touchy-feely assessment systems”, saying that companies that rely just on these kinds of tools may be setting themselves up for a legal nightmare.
It seems that in their view – and ours – taking a systematic and organised approach to performance reviews is still vitally important.
Read more articles about performance management here