Over the past few years, we have read about many large employers scrapping the traditional annual appraisal review, describing it as outdated and unsuitable in today’s workplace. Many of these organisations discovered that continuous performance reviews better align with the growing number of employees and their ongoing requirements. Staff are now expecting real-time feedback and information on demand.
So, with this shift, what alternatives exist to the annual appraisal? And how can this process be adapted to suit both the organisation and employee?
Traditional annual appraisal vs. continuous performance reviews
Let’s be honest, the annual appraisal is often dreaded by both managers and employees alike. For managers, it can involve potentially awkward conversations accompanied by substantial paperwork. For employees, it may represent their only opportunity throughout the year to discuss pay increases or potential promotions. There are also several other factors influencing the shift.
Staff want regular feedback.
Meeting annually to review performance is often demoralising but can also be demotivating for staff. Highlighting areas of improvement in one single session with an employee is rarely a positive experience. It’s often too late to effectively address serious performance issues or factors causing employee disengagement.
Regular feedback allows staff to review their output throughout the year. It also helps them to make changes, flag up if they are struggling, or request a change of direction.
Line management is evolving.
Depending on the size of the business, your team may work with more than one manager who will influence their development. Relying on one manager’s perspective during an annual review could lead to issues of bias. Gathering feedback from a range of people such as team members and other managers may provide a more realistic and objective picture of an employee’s performance and make any personality conflicts less of an issue.
Changing job roles.
As companies evolve and grow, roles and responsibilities can often change and develop. Continuous communication between staff and managers will allow your team to know what’s expected of them. The employee appraisal process needs to reflect the dynamic environment rather than a static assessment based on potentially outdated job descriptions.
Making changes to the appraisal process in your business
Switching from the traditional format to a process of continual review doesn’t have to be costly or time-consuming. Here are some tips on making a smooth transition:
Choose a feedback format.
Think about how you will monitor, record and track conversations with employees. Performance review software can be helpful to track objectives, outcomes, and allow for 360-degree peer feedback.
The difference between performance management and performance review
A performance review is your opportunity to reflect on just that. Consider recent performance and discuss future goals, pay and promotion.
Performance management, on the other hand, is a system to monitor and assist staff who may be underperforming and require support to follow a specific track.
It’s very important to maintain a clear separation between the two.
Encourage self-evaluation
Ask your team to regularly reflect on their performance and discuss their self-assessments with you. This can allow more productive conversations about professional development and make it easier to manage potentially difficult conversations and structure your job roles appropriately. It also empowers employees to take ownership of their professional growth.
Set goals and objectives
Work collaboratively with your team members to agree and set goals. These should be both achievable and motivational.
When they’ve contributed to their development plans, staff are likely to feel more empowered and typically more engaged.
Maintain flexibility with the goals, and review and refine them regularly to ensure they remain realistic and aligned with both individual and organisational needs. Replacing an annual appraisal with more regular checks in help to allow for this.
Consider personality profiling to understand your team
Remember that nobody wants to underperform. Personality tests (such as DISC) can help you understand why an employee may be struggling with your managerial style, specific tasks, or other members of the team for example. These insights enable you to implement necessary changes during performance meetings to support the employee rather than considering replacement.
Be clear on your company ethos.
Ensure your team understands what’s expected of them and how they can meet these expectations. Creating a company handbook with clear guidance can be a great start. Make sure this aligns with any individual development plans.
Document all discussions.
Create a system to document all performance-related conversations. Using HR software like Breathe HR could be beneficial for this. Documentation helps you to track development over time, including a reference to previous discussions. Having everything documented can also provide legal protection in case of any future issues.
Additional things to consider
Beware of micro-management.
While continuous performance reviews in place of the annual appraisal, can offer significant benefits, you should allow your staff freedom to use their initiative. Employees shouldn’t feel as though they are being constantly watched or criticised. The goal is to provide supportive development, not micro-management.
Make changes slowly
A phased approach can help staff who might feel overwhelmed or under pressure. Make sure all communication it clear throughout and provide documentation for staff to refer back to via the company handbook.
Explain the new process
When communicating the new processes, telling them why and how this will benefit them can help. Transparency builds trust and increases buy-in for the new ways of working.