almost 2 years ago by Jenny Woods

From Annual Appraisals to Continuous Performance Management. How Smart Organisations are Evolving

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How Smart Organisations are Evolving

Change has been afoot in the performance management landscape for some time now. Rumours abound about organisations getting rid of performance ratings. There’s widespread talk about the end of performance management. With speculation rife, it’s no surprise that the topic was one of the main attractions at the recent Chartered Institute of Personnel Development (CIPD) conference in Manchester.

Having been asked to judge the stands at the event, We Are Adam’s Head of Recruitment, Vanessa Jackson, took the opportunity to find out more. Here’s her take on the talk, ‘From Annual Appraisals to Continuous Performance Management’.

The Times, They Are A-changing

The rumblings of change started back in 2015 with professional services firm Accenture announcing the removal of annual appraisals for its workforce of over 300,000 people.

Where one leviathan leads, others follow and Deloitte announced a similar review. Tech giants – like Google, Facebook and Netflix – have gone a step further and decided to bypass annual performance reviews entirely. And this adjustment isn’t restricted to a handful of global corporates; research from PwC shows that two thirds of large companies are planning to rethink their approach.

A Slow Revolution

Annual appraisals have long been a cornerstone of the performance management process, generating a flurry of end-of-year activity with all hands to the keyboard come review time. They were deemed to be a useful way to carve out a period for reflection, to align individuals’ tasks to business plans for the year ahead and assess performance.

But in fast-paced workplaces where projects can be abandoned as quickly as they’re started, annual appraisals feel out of touch and ineffective at capturing always-changing workloads. This was reflected in PwCs research which found growing frustrations with annual appraisals in both manager and staff populations.

What was intended to be a process that set time aside for staff to focus on performance feedback evolved into a straight jacket. Time-poor managers often felt they needn’t give feedback throughout the year while staff wanted to know how they were doing on a more regular basis. Given all these opposing forces, it’s no surprise that performance management was ready for an overhaul.

What Does This Mean For Performance Management?

Is this the death of performance management as some of the hype would have us believe? Not at all. This is an evolutionary development that will take performance management from a tick-box process to a more regular, embedded part of business planning; from annual reviews towards a culture of continuous feedback.

In the same way that businesses are becoming more agile, so performance appraisals need to keep up with changing demands. The ability to operate flexibly and be more responsive as a business relies on enabling employees to be equally adaptive.

This means annual objectives set six or twelve months earlier are no longer effective. Instead, objectives need to be clarified more regularly so employees are more closely aligned to changing business goals.

In a world where we’re used to instant feedback on social media, waiting a year to be told how you’re performing feels outdated. In place of waiting twelve months for an appraisal, the emphasis is on managers holding ongoing conversations with employees, critiquing and coaching along the way.

How Can You Make This Happen?

If this is ringing bells for your business and you want to make a change, the good news is you’re pushing on an open door. Far from fearing managers’ evaluations, employees want more frequent feedback with bi-annual or quarterly reviews the preferred options.

Use Technology

Technology is on-hand to take performance appraisals to another level. A quick Google shows a vast range of performance management software that moves appraisals online. With set process flows, tracking and auditing capability, appraisals are no longer a management or HR initiative but one in which the employee has equal responsibility.

However, the technology is not perfect and, putting price aside, the main challenge with bringing in an online system is the extent to which the platform can accommodate the quirks of your organisation. Businesses with complex structures, such as matrix organisations, can struggle to get software to reflect their reporting lines.

Another danger of introducing a new system is that, without adequate training, there can be too much focus on completing the system to deadline rather than having an in-depth conversation. And, while elements such as personal development can be built in to the workflow, a shiny new system still doesn’t guarantee they’ll take place.

Develop a Culture of Continuous Performance Management

Which is where culture comes into play. Moving from annual to continuous feedback puts performance management and development on a different footing. Rather than seeing continuous performance management as a simple change in frequency, businesses can use this as a way to change attitudes and behaviours. Expedia used their move away from the annual appraisal to encourage managers to have regular check-ins and take a coaching-oriented approach to development.

Get Buy-In At All Organisational Levels

Implementing a new HR process needs buy-in from leaders, but projects that are truly successful have support from people at all levels of the business. A strong communications strategy will go a long way to introducing changes and reminding people what they need to do, when and why. Ensure your technology enables the right actions and helps employees take ownership and you’ll deliver a system by the people for the people.

Now all that remains is to train your managers to hold effective conversations – both the good and the bad – and provide the right coaching and development for their team.

Taking your organisation through a performance management evolution might not be easy. But for short term pain you get long term gain with a more highly skilled and engaged workforce that’s ready to deliver what the business needs.