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Doing Away with the Annual Performance Appraisal

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Many businesses are doing away with their year-end performance appraisal process because it’s actually doing more harm than good. This realization has led to new ideas in employee reviews.

To start, just the title of “annual” performance appraisal suggests a flaw in itself. If you have ever had a performance appraisal at the year’s end, can you remember how you felt? Probably pretty nervous, even if you were sure that you had nothing to worry about. There was still that sense of urgency with a long list of “what-ifs” running through your mind only because you had no idea what was in store for you.

Worried and Nervous

© Flickr user B Rosen

Let’s face it; a whole work year had passed since your last performance appraisal–a lot has certainly happened. This type of appraisal system creates an awkward dynamic between managers and employees. Managers are burdened with the time consuming process of setting the meetings well ahead of time. You, on the other hand, have to take time out of your day to meet for 30 minutes to an hour to discuss a whole year’s worth of performance. Is that really enough time to recap a whole year? It may not seem like it, but meeting on a more regular basis, once a month or even every other month, may increase the employee / manager engagement.

In an article from the Society for Human Resource Management Kris Duggan writes:

More frequent check-ins with employees saves time. It takes three weeks a year to do an annual performance review, or it can be done in small segments regularly, making it more relevant to the employee and less burdensome to the manager. Imagine waiting until the end of the year to get a summary of your Fitbit step count. The information obtained wouldn’t be as timely or relevant, and it certainly wouldn’t change much behavior.

For many individuals, good data is required for them to buy-in to something. This is exactly the angle that businesses and their executives are taking about the performance appraisal process. Currently, data that businesses are using to do performance appraisals on their employees consists of number scales that compare co-workers to each other. This often fosters unhealthy competition between employees. Duggan also notes:

. . . forced rankings, which typically require managers to rate each worker’s performance using a number that compares him or her with peers, don’t foster productivity but actually create antagonism between managers and workers.

To add to the author’s statements, David Brennan, who is with an employee recognition company says, “Ultimately, an employee’s performance should not be judged and compared to others, but judged against the metrics that are set for success for that role.”

What should you do differently to appraise your employee’s performance more accurately?

Throw out your old and outdated annual performance appraisal process and adapt a new and improved system that fosters more engagement on both the manager and employee’s behalf. Brennan states: “Leaders must be taught how to engage in conversations with employees that raise performance – not blood pressure.” More frequent check-ins result in employees feeling more relaxed about contacting and communicating with their managers. This also is true for managers feeling more comfortable with discussing performance, or potential roadblocks keeping employees from reaching their goals.

This leads to training your managers. They have to be able to have these conversations and have access to the data (mentioned earlier in this article) to coach employees to the level of success that all managers are looking for. Always be consistent with your practices so that employees know what to expect and when to expect these conversations. Whether it be once a week, or once a month, make sure that your employees are aware of these timelines and that they are consistent.

If you are able to master all of these things, your outcomes will include: positive feedback that will engage employees to work towards individual goals which increase productivity; an increase in the level of engagement between managers and employees; an increase in overall performance; a reduction in turnover; and finally, trust from your employees that you are there to help them do better.

Patrick McKenna graduated from St. Mary’s University, Winona, Minnesota in May of 2015. He is currently employed as an HR Assistant with New Focus HR, LLC in Indianapolis, IN. He assists in the areas of compensation, HR compliance, HR policies and procedures, background checks, to name a few.

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