The value of annual performance appraisals has been challenged by employers in recent years and subsequently, many have cast aside traditional appraisals in favour what the CIPD terms as ‘performance conversations’
These critics have deemed appraisals ineffective, a waste of time, paper driven and can risk damaging the relationship between an employee and their line manager. Research from Bersin by Deloitte found that out of 2,500 organisations surveyed, only 8 per cent believe that their annual performance evaluations delivered high value, while 58 per cent felt that the process was not an effective use of time.
Employees feel much the same. A survey by CIPD found that that staff appraisals can damage morale, with three out of 10 staff saying they are unfair and one in five feeling that they didn’t provide them with clear objectives and expectations.
So, is it time for companies to ditch appraisals altogether or does the appraisal just need to be modernised and brought into the 21st century?
According to the CIPD in companies where performance reviews were scrapped, the staff performance suffered so ditching them completely is a risk.
When comes to performance, the UK already falls behind many of its European neighbours so perhaps such as move wouldn’t be wise. Britain’s output per hour worked is now 22.2 per cent lower than the USA, 22.7 per cent lower than France and 26.7 per cent lower than Germany.
In my view, no matter how a company conducts staff appraisals, ensuring the people engaged and motivated and understand their goals and receive regular feedback is a vital part of managing their performance. I also believe that annual appraisals have a vital role to play and the solution is not to scrap them altogether, but to reform the process and bring it up to date.
While the old, manual process was flawed and far from effective, it was better than doing nothing. But the jury is out over whether manual paper based appraisals really delivered performance improvements. While the intentions may have been good, there is a tendency in companies to carry out paper based appraisals that are then consigned to a drawer and not reviewed until the following year.
Investing in a modern, technology led appraisal system can help companies get around this issue – carry out appraisals more quickly, transparently and to track performance over time and input feedback on a regular basis.
Using a cloud-based appraisal system will enable managers to receive and deliver feedback to their teams in a constructive way in real time, saving time, money and eliminating paperwork altogether.
Such a system allows for an employee’s performance to be assessed objectively against a set of competencies and all feedback, achievements and objectives stored centrally so that managers and employees always have a full picture of progress made, the objectives ahead and their employee’s performance.
Whereas traditional appraisals tended to only consider feedback from the line manager doing the appraisal, using appraisal software makes it easier for them to obtain 360-degree feedback from HR, colleagues and other managers, who may highlight skills and achievements that may have been missed by the line manager.
Finally, managers should remember that the performance appraisal is a two-way process, it isn’t just guidance from manager to the employee, it’s also asking how they can help employees overcome obstacles at work or home and what support they need to achieve the mutual goals set.
Whilst annual performance appraisals have become a contentious issue, companies must have an alternative way to manage and measure performance. Appraisal software provides a forum for regular feedback, recording achievements and addressing areas of concern – all of which can help improve employee engagement and performance.
Activ People HR have produced a free guide to managing appraisals and performance reviews, which HR Managers can download from their website, which will help them encourage line managers to deliver more effective performance reviews.
