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 make this change.

So the big names: Accenture; Deloitte; Adobe 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 tend to see this as something of the emperor’s new clothes as here at Actus we have always advocated the importance of the 1 to 1 in supporting high performance. 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.

So, what is different with year-round performance appraisal?

The common themes of what seems to work in the new world of year-round performance appraisal are as follows:

• Frequency – little and often, ideally monthly and at least quarterly but shorter and more focused (think 1 to 1’s)
• Future focused – Solution focused, review last quarter and reset/agree goals for next quarter
• Feedback and development orientation – a forum for two-way discussion, including both positive and developmental feedback

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’.

CIPD research suggests that on average managers spend less than 4% of their time in 1 to 1’s with staff

We also have to equip them with coaching skills and give them the ability to be open and honest about performance. They must 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.

How do you make it happen?

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 £19billion 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:

• Involve the organisation – Find out what people like/don’t like about the current approach to performance appraisal or performance management, when you propose the new process, ensure you make the link so they feel it was their idea.
• Gain clear senior sponsorship – This is about moving the responsibility for delivering year-round performance appraisal from HR to the organisation. This needs to be led from the top with senior managers prepared to lead by example and hold their own managers and teams to account.
• Develop your managers – Give them the skills to coach for development, give good quality feedback and address underperformance in the moment. Support them in practising and developing the confidence to manage all types of performance constructively.
• Be clear about the new expectations – Define what a good check in or 1 to 1 looks like. Don’t leave it fluffy and vague or you will simply go backwards as regular “check ins” slide as managers are too busy and you don’t have the annual performance appraisal there as a punctuation point.
• Monitor and follow up – Having set new expectations e.g. 6 weekly check ins, you need to be able to monitor that these are happening from the start and address those resistant managers who are hoping it will all go away. You need real time visibility of who, what and when meetings are happening  to do this effectively (Our software is great for this of course!) and you need to use all you powers of persuasion to get commitment from all managers. Recognise and hold up those who have embraced it as great examples and offer help to those who are struggling. Failing that, engage the sponsors and get them to kick butt!
• Align HR processes – Generate tangible benefits from these ongoing conversations by ensuring that development and training planning is also real time. So, when development needs are identified, they are addressed within a shorter time frame, reinforcing the benefit to the individual and the organisation of an ongoing approach.

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, wellbeing and career progression.

Done well this is the start of a Organisational Development Strategy that can deliver real benefits for all.

This article was written by Lucinda Carney C.Psychol; Founder and CEO of Actus™