Has appraisal as we know it had its day?
A report published by The Times newspaper on 29th July 2015, claims that two thirds of organisations plan to radically change their performance appraisal schemes and a further 1 in 20 businesses plan to drop their schemes altogether in favour of more continuous methods of review and communication.
Does this signify the demise of the performance appraisal as we know it? Perhaps it does and more controversially, perhaps it should. This may sound strange coming from an HR professional within the legal services sector, who might be expected to be affronted by the potential change to an age-old HR staple. However, if something is not working, rather than continuing with the same scheme year in year out, does it not make sense for change to be considered by a business?
To address this issue, we need to consider why some organisations have reached this stage. Through our extensive work with clients in this area (and in truth from previous personal experience), we have discovered that all too often, employees and managers dread appraisals. They are often put off or do not take place at all, are frequently unplanned or unprepared for and are sometimes carried out poorly. Furthermore, the paperwork which was intended to facilitate the process often becomes so time consuming, cumbersome and unrelated to every day work activities that it hinders the process or at worst, is seen as the process. Is it any wonder then that companies experiencing this are looking to wave the current process goodbye?
Effective performance appraisal typically looks at how competently someone has been performing their role, considers work objectives performed in the past and critically, sets, reviews and re-positions ones for the future. It also allows time for employees and their managers to provide feedback, outline any concerns or career aspirations, review development needs and critically, to motivate employees in order to achieve enhanced performance in the future. It also provides a written record which can be helpful in other processes such as internal promotions, pay reviews, capability investigations, reorganisations and redundancy exercises. These are all valuable activities for an organisation, so having nothing in place at all to review performance may not be advisable.
However, it is not set out in stone that a performance appraisal must take place x times a year, be in y format and never be altered from now to eternity. It makes sound business sense to review your scheme regularly (as you would other processes) and to make sensible changes in line with the way you work. One size though is unlikely to ever fit all. There is an enormous difference between what will work at a tech start-up, a hotel, a factory, a school and a financial services organisation. For instance, although an annual meeting might still work for some more traditional institutions, more regular ‘sound bites’ and smarter mechanisms might be of more value to a faster-moving company. Some problems with appraisal have also emerged when a scheme which has operated quite successfully at one organisation has been transported to quite a different one. Similarly, when a scheme which has operated well for one distinct group of employees such as for a sales force, has been used for other employees it was not designed for, it has not always had a positive result.
To move forward and to ensure performance review, development and internal communications systems do align with activities, businesses need to get back to basics, to consider what is and is not working, to decide what they wish to be reviewed and how best this can be achieved. Once changes have been developed to any existing processes or new ones introduced, a pilot scheme to test out the changes can often work well and enable fine-tuning to take place prior to any major roll-out.
If The Times newspaper is correct that after years of growing disenchantment and disinterest with appraisals, some companies are now energised to dust off archaic documents and to take a fresh approach to performance review, development and ongoing communications, this can only be a positive step for everyone.