Performance management is high on the agenda for many organisations. In an increasingly competitive business climate, companies can’t afford to have ‘coasters’. They need their people to be performing at peak and agile enough to respond to new opportunities and shifts in the market.
There is an increasing body of evidence that suggests the majority of employees not only welcome the opportunity for regular performance reviews, but that those companies that have abandoned them have seen a drop in productivity and engagement, especially amongst higher-performing employees.
However, as a recent survey by YouGov/MHR discovered, much still needs be done to get performance management right.It found that just “54 per cent of employees described their last appraisal as pointless or time-consuming, with only 14 per cent judging the process as useful for their career development.”
So what can you do to make sure your appraisals blend the best of the new thinking about performance management with the need for a formal process that helps managers keep their people engaged?
1. Clarify the process
There’s a tendency for managers to approach the annual appraisal on automatic pilot. They ask the same old questions and get employees to tick the same old boxes, without really thinking about why they are having the conversation in the first place. It’s worth devoting some time before the next round of appraisals kicks in to getting really clear about the purpose of the exercise. Is your goal to set objectives and assess people’s progress against targets? Or maybe you want the focus to be more on developing your people and helping them achieve their aspirations? Whatever the purpose (and it may be a combination of things), it’s important to have a clear, consistent and transparent approach.
2. Focus on frequency
One of the biggest criticisms of the annual appraisal is that the goals set are typically out of date before the next one comes around. In the YouGov/MHR survey, 62 per cent of respondents said only some or none of their previous objectives were still relevant a year down the line. The formal once-a-year review does still have its place. In many cases, it’s used to feed into the annual salary review, for example, or to help HR prioritise the training budget for the year ahead. But regular, more informal check-ins are also valuable. They support a more agile approach to work, allowing managers and their teams to adjust goals as circumstances change or new opportunities come to the fore. They provide a space for employees to discuss challenges as they arise and for managers to provide the necessary support and development on a just-in-time basis. It may feel as if it takes more time, but the investment will pay dividends in terms of a more responsive, engaged and productive workforce.
3. Find the right format
It’s vital to find the right mix between a performance management process that’s easy for everyone to complete, but which also prompts open discussion and provides the manager with valuable insights about how their people are doing and what they need. Standard forms and templates are useful – just make sure they are not too rigid or it will inhibit discussion. You could consider combining ‘check-box’ elements with more open questions, for example. This will provide HR with the structured information they need to see the bigger picture – about training needs for example – but will also open up dialogue about people’s aspirations and any challenges they may be facing.
4. Exploit technology
While technology can’t have the conversations, it can definitely support the appraisal process. Performance management software, like Cezanne HR’s, can be set up to prompt managers when appraisals or check-ins are due, and provide a framework for a more consistent and organised approach. They eradicate the need for different Excel spreadsheets, which get passed around between managers and HR and are frequently out-of-date and disconnected. Instead, a good performance management system will provide one central place where information can be stored and easily accessed by the people who need to see it. It’s easy to check back on what’s been discussed and agreed, and up-date on an ongoing basis to reflect subsequent discussions, and provides an invaluable tool for managers who need to keep track of the progress of their often geographically dispersed teams.
5. Train managers to make it a two-way process
Appraisals can sometimes be a bit of a one-way street, with the manager taking the lead and focusing on giving feedback on the past year’s performance. The key to a more engaging and productive process is to encourage managers to make it a genuine dialogue, where employees can give their perspective and share their ideas for taking their performance to the next level. Try equipping managers with open-ended questions they can use, and encourage them to think in terms of moving towards a more dynamic, empowering process, where employees are taking responsibility for their own performance and development and where individual and organisational goals are more closely aligned.