More and more organizations feel that annual performance appraisals are a waste of everyone’s time. The process is too lengthy and competes with heavy workloads and team deadlines. Annual appraisals are often too focused on the past and subject to manager biases. So, how can the performance appraisal process be made more effective?
Expressions in context
Have a look at the conversation below and write down the words and phrases you might find useful.
Lena and Tom are managers from different organizations. They have met at a conference and are discussing staff performance appraisals.
Tom: I’m not looking forward to getting back to the office on Monday.
Lena: Why’s that?
Tom: I have to start on the annual performance appraisals for my team. That’s 12 people. It takes ages. First of all, I have to fill in all the appraisal documents. Then, I need to hold a one-hour feedback session with each person. But there are also two urgent reports I have to finish for a board meeting.
Lena: Poor you. Thank God I don’t have to do that any more!
Tom: Does that mean you don’t do any annual appraisals at all?
Lena: That’s right. We’ve gone over to a different system and now do regular one-on-one feedback sessions instead.
Tom: Isn’t that even more time-consuming?
Lena: Not really. The sessions are short. We have very clear, specific goals connected to the employee’s career development.
Tom: But how do you assess pay increases if you don’t appraise performance?
Lena: We’ve seen that managers often are biased in their assessments. So, we base the person’s remuneration on an accounting method. This analyses the monetary benefits they bring to the organization.
Tom: I can certainly see there might be some advantages to your way of doing things.
Lena: We also use a 360-degree feedback system run by HR.
Tom: Wow! You certainly take giving feedback seriously. I need to look into this a bit more carefully.
Good to know
A good way to motivate and empower staff is to frequently collect and distribute feedback – rather than rely on just a single annual appraisal:
- Many managers are moving towards having regular but fairly short one-on-one feedback sessions with their staff. These sessions focus less on evaluation and more on professional development. Their aim is to help employees along their career path rather than reward them for past achievements.
- Bonuses and promotions are no longer tied to the appraisal system. Other factors are used instead to measure compensation, such as the employee’s market position and competitive value.
- Some organizations have replaced the traditional annual appraisal with feedback methods, such as 360- degree reviews, where the employee receives feedback from several levels in the organization – not just from their boss. Success becomes more about working with your team, colleagues and even customers.
- Organizations have realized that if they adopt a more future-oriented, human approach to assessing their employees, staff will be more satisfied with their situation and more likely to perform to the best of their ability.