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The traditional performance appraisal process can be incredibly painful, let’s face it. At the end of the day, the focus really should be on the employee’s performance, how to optimise it through constructive feedback and the output should be increased job performance, motivation and of course employee engagement. First, let’s look at the challenges and how employee appraisal software can make a difference.
The Challenge
The challenge for most organisations is that the conversation isn’t conducted as well as it could be by the line manager, often people complain that the appraisal meeting is transactional and the focus is on past performance as opposed to future potential. If the performance appraisal process is designed to evaluate employee performance and be used to allocate pay rises or bonus’s based on the employee’s contribution then this can dominate the process with people gaming the system and inconsistent use of rating scales. Again, this can massively demotivate employees and potentially harm their performance—the exact opposite of what the appraisal should achieve.
So what can we do to ensure that our performance appraisal process is motivational, effective and encourages sustained high performance and talent retention? Selecting a great employee appraisal system like Actus can give you the structure and framework that you need to ensures that managers and employees follow an effective year round process that establishes clear expectations through specific objectives that align with organizational goals. It incorporates constructive feedback during regular check ins throughout the year and includes conversations around development needs and career advancement or promotion opportunities.
Ultimately, the appraisal system provides the structure and the quality of the experience comes down largely to how the line manager conducts it. If they treat an appraisal as something that is time consuming and more effort that it is worth, then the appraisal process will be less motivational for the manager’s direct reports. The key is to ensure that all managers, not just HR leaders, see the performance management process as meaningful.
Your appraisal system should enable managers and employees to define and clear goals and enable these to be broken down into smaller steps or milestones that the employee can use to evaluate their own performance. Evidence shows that clear goals, coupled with ongoing feedback is the most powerful way to encourage high performance and continuous improvement.
One to one meetings are the foundation of a high-performance culture, but their importance can be overlooked. Whether we call them one-to-one’s or ‘catch-ups’, they should take place at least monthly and incorporate quality feedback on performance. As mentioned above, behavioural science shows the importance of goals and regular feedback. Enabling regular one to ones is the best way to embed this in your culture.
The performance management process should incorporate employee development that will help them perform more effectively within their role or job function. It should identify areas for additional training or coaching that will improve the employee’s skills. In the case of low performers, this should help them to focus on the right skills to improve their performance. Top performing employees should also feel valued for their overall contribution and recognise that they are progressing their own career or development opportunities.
There is a place for formal reviews within an effective performance management process, it’s just that this should be a culmination of all the previous conversations and feedback. Any effective performance management system should ensure employees are just as able to contribute to the end of year review as their line manager is and the rule of thumb is NO SURPRISES! The mid or end of year performance appraisal form might include questions around how the employee’s behaviours are aligning with the company culture, perhaps through questions around values or behaviours.
The most helpful performance appraisal software will provide management information that allows HR to compare different performance periods to see whether performance is improving or stagnating. You want reporting that provides a comprehensive view of performance or development needs across the business. This reporting requirement may vary depending on the audience, activity or review period so you want a system that provides flexibility.
One of the most powerful aspects of the reporting within Actus performance appraisal system is our calibration or moderation reports. Many organisations still try to use performance evaluations to allocate reward against performance in the hope of delivering better outcomes in terms of business performance or individual contribution. To do this successfully requires carefully thought out rating scales and HR strategies that include a moderation or calibration process to ensure that managers conduct fair appraisals. Only a handful of appraisal systems can support you in managing this challenging process objectively and this is a common reason why HR professionals turn to Actus.
Do you really need 360 degree feedback within your appraisal system? Well the honest answer is that it depends on your purpose! The reality is that 360 degree feedback is a really powerful development tool but it isn’t always appropriate for performance evaluation. If you are unfamiliar with 360 degree feedback, it is a way in which individuals can gather feedback on their performance or behaviours from multiple sources e.g. their manager, colleagues customers and compare it with their own perception. This is usually collated into a report which is discussed with a neutral coach who helps the individual to define actionable feedback that they can work on over the next review period.
In our view, 360 feedback can be a really powerful part of your human resource management strategy. However, it must be used as a safe way to evaluate employees performance. We don’t believe that formal 360 feedback should be part of performance reviews. Instead, performance should be evaluated based on SMART objectives agreed through goal setting. This should not be a subjective view of an employees performance and that is the risk if 360 feedback is the tool.
However, we do think that 360 feedback is a great addition to a performance management tool if you are using it as a way to provide feedback, identify areas for growth, provide training or generally invest in the development of your people. Actus 360 NOW is a really popular module that enhances our Actus Performance Management system or functions as a standalone development tool. Do get in touch if you would like to take a look at the powerful functionality and user friendly reports.
Ultimately, as we have said from the start, performance reviews alone are not the way to increase employee engagement. Effective appraisal systems offer far more than just performance appraisals. They should provide a structure for a whole year of meaningful conversations between managers and employees. Appraisals should focus on both the employee’s performance and their development and career aspirations. They absolutely need to be a tool that encourages regular feedback. Additionally, they should be flexible enough to support your performance management process. At the same time, they should provide you with the data and management information necessary to support your HR Strategy.
To find out more why don’t you check out Actus Performance Appraisal System?
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Read more blogs by Lucinda Carney see here.
Download our free Managers Guide ‘7 Simple Steps to Appraisals’ – this breaks down 7 simple but essential steps for Managers to achieve a smooth, effective appraisal process.
Listen to ‘The HR Uprising Podcast’ hosted by Lucinda Carney, which has a variety of informative topics in business and HR. Visit the HR Uprising website or download wherever you get your podcasts from (YouTube, Spotify, Apple etc). Listen to episode 206 ‘Rethinking Appraisals’
HR Uprising Podcast episodes on Performance Management
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