Performance appraisals need an overhaul

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Dreading another year of haphazard and poorly executed performance appraisals? Karen Barker provides her tips for revamping the process.

Performance appraisals can increase team morale, staff performance and commitment. However, if done poorly they can do more harm than good. According to estimates, only 35-40% of companies manage performance reviews well. For the remaining 60-65% they are a stressful and negative annual experience that adds very little value to the employee’s growth, while at other times in the year their true needs and challenges remain ignored.

Many organisations treat performance appraisals as just another annual task in a time-poor business environment. Instead, the process should be one in which hard-working employees receive appropriate recognition and gratitude, and managers have the opportunity to acknowledge the outstanding contributions of members of their team.

 What can HR professionals do to change the way that managers view performance appraisals?

In order to make sure that the whole process is positive and effective, HR professionals need to encourage managers to turn appraisals into a regular business activity, rather than simply having one per year. The reason for this is that when performance is not monitored on an ongoing basis, employees and managers might not feel as though they are able to voice any concerns that they may have. Consequently, employees are often unprepared for constructive feedback during appraisals.

HR professionals should suggest that ‘performance plans’ and appraisals be kept separate and that space is made for the former if circumstances warrant it during the course of the year.

What makes a good performance appraisal?

Performance appraisals do not have to spell angst for those involved. HR professionals can work with managers to help them improve the effectiveness of the process. Some simple strategies that you can suggest include:

  1. Collecting feedback. Managers should collect positive data on their employees’ strengths throughout each year and not just on the period leading up to the appraisal. Positive news is easy for the manager to deliver and for the employee to hear! Treat constructive feedback as areas of opportunity for growth and continued self-development and always start the appraisal with positive feedback. Managers should also include feedback from colleagues and peers in the review – to ensure the appraisal is well rounded and includes different perspectives on behaviour and approach. This additional feedback should be collected anonymously and via a formalised and consistent process, for example, 360 Degree Feedback, which can be provided by an ICF (International Coach Federation) credentialed coach.
  2. Keeping it informal. Reviews should be conducted in an informal setting, such as a quiet café or nearby grounds that offer the opportunity to pleasantly sit, where both parties can relax and have a comfortable discussion without the pressure of more formal surrounds.
  3. Focusing on the future. Dialogue should focus on future plans and objectives, and how both parties can work together to achieve results. Managers should ask employees what they need from them, or how they could be of more assistance. Then objectives and support plans should be agreed upon.
  4. Continuing to collaborate. Both parties should agree to maintain an honest and transparent dialogue and plan to regroup quarterly to discuss progress and provide opportunities to reset objectives. During these quarterly meetings, employees should present a list of achievements for discussion in addition to being honest about any areas in which they could have performed better whilst acknowledging how a better outcome could have been achieved.
  5. Redesigning the appraisal document. Appraisal documents should not represent employees as numbers. Allow the form to speak about the person’s strengths, achievements, goals, results and aspirations. This will turn the dread that usually comes with a performance review into a welcomed and emotionally uplifting experience for all parties.

 

If HR professionals can encourage companies to change the way they think about performance appraisals and transform them from a once-a-year chore into quarterly reviews that facilitate an ongoing and open dialogue that allows room for employees to flourish, they will effectively be helping to create an engaged and vibrant workforce that is committed to the continued success of the organisation.

 

About the author

Karen Barker is Director and Principal Consultant at Transitional Executive (http://transitionalexecutive.com.au/), and is an International Coach Federation credentialed coach.

  • Linda on 23/01/2013 3:06:08 PM

    Indeed, Karen! Great article and valuable hints. If you have timely ongoing feedback then all you need is a few simple review 'check-ins' each year to summarize the past and concentrate on the future. The performance appraisal doesn't have to and shouldn't be a burden, nor a box ticking exercise. The value lies in communication and collaboration.

    Thankfully there are tools that help you capture the process, like Small Improvements http://www.small-improvements.com which makes it even easier for HR, managers as well as employees.

  • Bernie Althofer on 23/01/2013 3:55:13 PM

    Performance appraisals and assessments can be beneficial to all parties provided that the policy and procedures have been well implemented.

    Experience suggests that implementation is often the problem that makes or breaks the effectiveness of the system. People are busy working and may not have the time required to implement what they see as a bureaucratic and time consuming process if they have not been exposed to the realities of how the system works.

    There is little doubt that a well implemented system can and does consume time. However, as has been discussed in numerous other forums, it also seems that organisations need to make a commitment to train all those involved. This does not mean providing exposure to the policy and procedure and telling people "you'll pick it up as you go". Unless the implementation process contains regular training, or the policy and procedure is not updated, then some people will fall into bad habits and take short cuts.

    Performance appraisals and assessments involve people, their future and the implementation process may have an impact on their careers. As Linda has indicated, it shouldn't be a tick and flick burden, but it should be a living, breathing ongoing process with some formalities built in. In my view, if you are paid to manage people, then you need to understand how your organisational performance appraisal and assessment system or processes work.

    It seems that performance 'discussions' can be the starting point in relation to termination or litigation, or allegations involving bullying, harassment or other forms of unreasonable management.

  • Dr Tim Baker on 24/01/2013 3:48:07 PM

    I don't believe we ought to have performance reviews. I think they should be abolished and replaced with a better system.

    There are numerous things wrong with the standard system of appraising performance. After interviewing 1,200 managers and HR professionals over the past few years across all industries. I simply asked them to identify any shortcomings the standard performance appraisal system has. Responses varied, but essentially I identified eight themes from my research. The eight shortcomings are:

    •They are a costly exercise
    •Performance reviews can be destructive
    •They are often a monologue rather than a dialogue
    •The formality of the appraisal stifles discussion
    •The infrequency of reviews
    •Appraisals are an exercise in form filing
    •Performance review are rarely followed up
    •Most people find the appraisal stressful

    So passionate am I in my belief about ending peformance appraisals that I have written a book out later this year entitled: "The End of Performance Reviews", published through Palgrave Macmillan - the UK-based international publishing house.

    Pardon the blatant plug. But I believe if managers are doing their job and giving regular feedback on performance, why do we need to down tools once or twice a year and "appraise performance"?

    Dr Tim Baker

  • ian on 25/01/2013 8:05:32 AM

    The article is fine in itself but sidesteps the real issue of providing constructive debate and avoiding a destructive result if the news you have is not all warm and full of praise. I agree that to set down a day, date, time and place for a once a year appraisal is a nonsense and often artificial. Good behaviour demands early recognition and poor performance should be addressed just as speedily.

  • Les Pickett on 25/01/2013 10:39:46 PM

    What would be lost if the performance appraisal programme was scrapped?

  • Dr Tim Baker on 29/01/2013 4:15:50 PM

    Ian,

    I think tough conversations are necessary and out to be conducted on the run and not once or twice a year. Likewise, I think positive praise ought to be done the same way, at the time of the event.

  • Dr Tim Baker on 29/01/2013 4:24:32 PM

    Les,

    I can't think of anything that would be lost without a perormance appraisal. If managers are doing their job and giving appropriate feedback throughout the year then why do we need to down tools and appraise performance?

  • Richard on 30/01/2013 3:47:15 PM

    I think the notion of doing away with Performance Appraisals is ridiculous! The process in most cases should be a constant interactive process and both parties should be on the same page in terms of ratings before the actual review meeting. The fact they are not indicates managers are not doing their jobs by providing regular feedback. The "shortcomings" quoted are the too familiar gripes from those who do little in terms of engaging staff and providing feedback in the moment. The appraisal is an opportunity to take time out reflect on past performance and look to the future.(Not to mention provide the executive with a view on potential talent).
    I can tell you more staff leave poor managers unable to provide direction and feedback than organisations with an appraisal process.

  • Dr Tim Baker on 30/01/2013 5:55:10 PM

    Hi Richard,

    I think you make some good points.

    However I agree with Les. If managers are doing what they are suppose to be doing; that is, giving regular and timely feedback then there is no need to side down again twice a year and repeat this. Ironically, I thing the standard performance review process actually inhibits regularly and timely feedback. Some managers actually think that they can save all this feedback up for the big event - the performance review at the end of the year.

    I am interested to know why you think we need to rate people. How does that help? Surely the point of any feedback is to identify tangible ways to improve someone's performance and implementing that strategy.

    I am interested in your view Richard.

    Regards,

    Tim

    Tim

  • Dr Tim Baker on 30/01/2013 5:58:11 PM

    Hi Richard,

    I think you make some good points.

    However I agree with Les. If managers are doing what they are suppose to be doing; that is, giving regular and timely feedback then there is no need to side down again twice a year and repeat this. Ironically, I thing the standard performance review process actually inhibits regularly and timely feedback. Some managers actually think that they can save all this feedback up for the big event - the performance review at the end of the year.

    I am interested to know why you think we need to rate people. How does that help? Surely the point of any feedback is to identify tangible ways to improve someone's performance and implementing that strategy.

    I am interested in your view Richard.

    Regards,

    Tim

  • Richard on 31/01/2013 4:16:13 PM

    Tim, Done properly the process provides a benchmark and a barometer through which the executive can make determinations about how effective staff are and if there parts of the business that require support/focus. Marry this business results and its an effective diagnostic tool. The output of the review can also be used as part of determination for applying for future more complex roles. Having comparitive measures makes the task easier for a hiring manager. The process should not be tools down approach it should be woven into regular discussions but at a certain time of year we quantify progress over the year with an assessment. I have implemented numerous systems over the years and seen good and bad applications of it.

    What I would agree with you is that organisations are better off with no performance appraisal process than a poorly implemented and managed process.

  • Bernie Althofer on 1/02/2013 9:13:10 AM

    As I recall from previous online discussions, and from some recent discussions regarding performance appraisals, some organisations believe that performance appraisals and assessments are absolutely essential, not only from the point of view of managing people, but also from a legal point of view particularly when it comes to addressing issues such diminished work performance or responding to allegations such as bullying.

    It may well come down to how the system or process is actually implemented. As I noted from some recent discussions, it was suggested that if managers don't know what their staff are doing and how that aligns with organisational requirements, then perhaps the managers should either look for other employment or actually learn what it means to be a manager.

    This will be a discussion that will continue to evolve and identify a raft of issues (as has other similar discussions) and yet it might simply boil down to telling people what it is they are to do, how/when/and where they are to do it, and what happens when they don't do it (and corrective action can be in the form of learning and development, or termination.

    From a legal point of view, there needs to be a process in place and having had some personal experience where there was an organisational policy but there had been non-compliance, there were considerable difficulties in addressing a raft of workplace issues related to performance.

  • Sebastian Harvey on 4/02/2013 10:38:44 AM

    A question emerging from these comments seems to be whether performance appraisals serve the governance or the performance of the organisation. I don't believe these are mutually exclusive issues.

    Organisations benefit from fair, transparent processes to reward good performance just as they require fair and lawful processes for dealing with disciplinary matters (either conduct or capability). Several pieces of research by the Corporate Leadership Council show employees who know they are being treated fairly by their manager will increase discretionary effort and therefore their performance. And a key part of that is being clear on expectations and standards, which are set and re-set through the appraisal process. Fair and accurate regular feedback is the other key component of an effective performance system.

    In my experience it is not necessarily the regular feedback that managers struggle with, but the ability to engage in meaningful reflective practice in the 'formal' appraisal meetings. If they do actually value reflective practice(and many don't) they often lack the skill to do it. Organisations would do well to invest in building this capability and understanding in their managers if they want to revitalise their appraisals.

  • Dr Tim Baker on 4/02/2013 6:40:25 PM

    Richard, your contribution is one of he most articulate defences of a good performance review system I have read. I guess my concern is that I have not witnesses as many good applications of it, hence me devoting my energies to finding a different way. If you, and others, are interested, I would be happy to share this with you.

    Sebastian, I think you are right: managers generally speaking lack the skills necessary to conduct productive appraisals.

    Thank you gentlemen for the constructive input.

  • Tony van Rensburg on 5/02/2013 10:27:25 AM

    I agree with most comments made so far. I am a 'reluctant' advocate for retaining the performance review as a management tool. In my experience employees and managers need an opportunity to assess and be assessed - we need to know how we are doing, often in a formal way. In addition, many organisations (especially the bigger ones), have remuneration and career advancement programs reliant on measurement. Unfortunately, Ricardo Semler-type cultures are rare, and so imperfect systems like the performance review have a role to play.

    However, we can be much better at it if we keep an open mind and work hard to change the entrenched mindset many of us have about the process. In my view that mindset is about creating a Performance Partnership culture where there is level playing field and the more traditional boss-subordinate approach is replaced with regular 2-way conversations which are then summarised as part of the once or twice a year formal reviews. I have experienced really effective systems which are done on the 'back of an envelope'; so highly engineered systems are not necessary in my view. Managers and employees also need training in giving and receiving feedback effectively.

  • Richard on 5/02/2013 3:58:39 PM

    Dr Tim. Thanks. I am always open to alternatives as I have discovered many organisations need to determine what will work within their culture and management capabilities rather than the one size fits all approach

  • Dr Tim Baker on 6/02/2013 6:42:06 AM

    Hi Richard,In a nutshell, my alternative is referred to as "The 5 Conversations' Framework". Each manager is to have five 10 to 15 min conversations with their colleagues every six months. These conversations are focused on a particular topic. These include:

    Climate review conversation
    Strengths and talents conversation
    Opportunities for growth conversation
    Learning and development conversation
    Innovation and continuous improvement conversation.

    I have attached an article about this which may be of interest.http://winnersatwork.com.au/publications/MT0311_14-15_appraisals_draft_v1_110111.pdfDON'T UNDERESTIMATE NON-JOB ROLES
    Palgrave Macmillan are publishing this approach in a book out in September entitled: "The End of the Performance Review".


  • Richard on 7/02/2013 7:05:36 AM

    Thanks Tim, Will read it with interest

  • Dr Tim Baker on 7/02/2013 3:28:48 PM

    The other thing that disturbs me about the standard performance review is that the main focus is overcoming 'weaknesses'. Why is that? You give greater return focussing on strengths and talents, and we all have them ...

  • Peter on 7/02/2013 4:21:26 PM

    It seems to me that we can all agree that we need performance reviews, appraisals, or performance conversations - whatever you wish to name. I just wonder how would someone have an EFFECTIVE "climate review conversation" with a factory operator where English would be his / her second language and if I need to create that common ground and understanding with him/her. How could I break down the broad questions that Dr. Tim is proposing to tangible measures for the operator to understand, and when I leave, should I voice record all of the conversations I have had with 100 operators for the next manager to follow through!!!.


  • Bernie Althofer on 12/02/2013 10:17:47 AM

    It seems that it all revolves around the C word - communication. Talking with, talking at, talking about, and even not talking with, about or to people seems to be an issue in some workplaces.

    Some people can be excellent at operational activities and when they are put into the dynamics of communicating with a worker about issues relating to performance, workplace standards, productivity and a host of related issues, they struggle. Knowing how the process works is one part of the equation, and I would suggest when the C word become part of how the process should be applied, this is when it starts to fall apart.

    Giving constructive feedback can be interpreted by some in a negative way, so it is important to chose words carefully.

    From my perspective, the issue of performance management/appraisal/assessment is 'governed' by the workplace culture and particularly when 'time' is perceived to be the limiting factor. Effective and meaningful communication can address so many of the workplace ills, if only people allocated time and made the communication (or conversation) a priority.

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