This year has been all about ‘ditching the performance appraisal’ not simply moving away from paper but really changing the culture of your organisation from a once yearly ‘tick box appraisal’ to something more organic, meaningful and ultimately more effective – year-round performance appraisal or performance achievement as we like to call it. Let’s face it, many of us dread performance appraisal in its current guise but wanting to change the process without throwing the baby out with the bathwater is easier said than done. This blog looks at why this is so challenging and gives some practical guidance on how you can actually make this change.
So the big names: Accenture; Deloitte and even GE who were particularly famous for their commitment to forced ranking have all ditched the annual appraisal recently in favour of a more ongoing approach. Don’t be fooled into thinking that this means appraisal is dead and HR professionals can put their feet up. Instead, it is more of a change in style from backward looking, once yearly meetings that simplified an employee’s performance down to one performance rating (often ranked against their peers) to more regular employee led check-ins with more of a feedback and development focus. Having been a HR professional myself for 20 years, I have a tendency to see this as
something of the emperors new clothes as here at Actus we have always advocated the importance of the 1 to 1 in supporting high performance (as you can see from this illustration). However, if this is not the case in your organisation yet, let’s try to give you a steer on how and why to make this a reality in your organisation.
The common themes of what seems to work in the new world of year round performance appraisal are as follows:
It sounds easy, but to achieve this we are usually talking significant behavioural and culture change for many managers in most businesses, particularly in this fast paced world. We have to motivate managers to prioritise time with staff (recent CIPD research suggests that on average managers spend less than 4% of their time in 1 to 1’s with staff). This may mean being clear about that side of the role or simply recruiting more people with the ‘people gene’. We also have to equip them with coaching skills and give them the ability to be open and honest about performance. They have to learn new habits, spotting opportunities to deliver good quality feedback both positive and negative and overcoming the discomfort of addressing performance issues full on. We also need to give staff the permission (or expect them) to take the lead in driving these meetings or at least making them two way.
If you are not convinced yet, bear in mind that the potential business benefit of this new approach could be high. Adobe have reported a 30% decrease in voluntary attrition and a 50% increase in involuntary departures — people who weren’t meeting expectations are now dealt with more directly and quickly instead of being able to hide until the next performance cycle.
Let’s not kid ourselves that managers who were reluctant to do once yearly appraisals will suddenly bounce around with glee at the prospect of being expected to have more frequent honest conversations with their staff. Many of them just don’t have the skills as unfortunately the standard of people management in the UK is still letting us down. Ineffective management is estimated to be costing UK businesses over £19 billion per year in lost working hours and 43% of UK managers rate their own line manager as ineffective (BIS, 2012). It seems that little has changed – borne out by fact that the UK productivity gap is reported to be the widest it has ever been in 2016.
Year-round performance appraisal is fundamentally about culture change and the following steps will help you on the way:
Depending on the size of your organisation, it’s unlikely that you will be able to embed year round performance appraisal on your own. Ideally you need a happy band of evangelists or champions from within the management population who will take this concept and run with it, but they will always need a change leader or two from HR to help tweak and improve the process along the way. As it becomes more embedded, you can layer on enhancements around talent management; recognition, well being and career progression. Done well this is the start of an Organisational Development Strategy that can deliver real benefits for all.
To find out more about how Actus Performance Appraisal Software can help you to embed year-round performance, arrange a demo by contacting us below.