Is it time to can performance reviews?
Th e p e r e n n i a l d i l e mma comparing the eff icacy of occasional formal performance appraisals to that of a system of ongoing informal manager-to-employee feedback grabbed headlines when Accenture announced that it would no longer be linking its forced rankings system to formal annual performance appraisals. Instead, the company is implementing a system that will provide employees with feedback on t heir performance on an ongoing basis.
The debate should not focus on the merit of one system over the other, but should consider the value of both. The Corporate Leadership Council, a world thought leader in human resource best practice, showed that ongoing informal feedback is the most powerful tool in driving performance. Informal feedback should be detailed, with specific praise or criticism being given to the employee within 48 hours of an event occurring. It is every supervisor’s and manager’s duty to regularly let their staff know how they are doing; that is how performance and careers are best shaped. CONDUCTING PERFORMANCE APPRAISALS For this to succeed, organisations need to foster feedback-rich cultures where providing praise and constructive criticism is a visible and tangible core activity. All staff members need to buy into a system of open feedback across the organisation’s levels and departments. This will benefit both the organisation and its employees.
In order for performance appraisals to be seen as valuable, they need to be based on pre-agreed measurement systems that are job-specific. Both the manager and the staff member should receive the output from the measurement system on a regular basis, for example, to allow for continual responses to performance lapses or the recognition of good performance. The performance appraisal should always be a summary of these ongoing performance measures and feedback discussions. The golden rule of performance appraisals has always been “no surprises” – everything that is raised in a performance appraisal meeting should have been previously discussed and attended to. Performance appraisa l outcomes often serve as an indication of what management decisions should be made regarding important issues such as t raining and development; t he justification of bonuses and increases; promotions and the future of employees who are not performing at a satisfactory level. It will be interesting to see how Accenture makes these decisions if the performance information is not consolidated and discussed a couple of times per year.
Performance appraisals are never a neutral event – the outcomes can either improve or worsen the relationship between managers and their staff. Effective performance appraisals require that both parties receive training on how to conduct these meetings, as both parties should be equally prepared. Both should have an equal amount of time to speak during the appraisal, which should be divided into a discussion of the past and planning for the future.
Performance ranking systems that pit staff against each other often lead to unintended hyper-competition between staff members within an organisation. This can lead to the withholding of information and resources, a lower likelihood of innovations occurring and best practice not being disseminated across the organisation. The sweet spot between internal competition and internal co-operation has to be found. This is where transparent performance measures are in place and feedback is provided regularly. Organisations that find this balance should also recognise and reward employees – both financially and by other means – when they reach targets and share knowledge.
IT IS EVERY SUPERVISOR’S AND MANAGER’S DUTY TO REGULARLY LET THEIR STAFF KNOW HOW THEY ARE DOING; THAT IS HOW PERFORMANCE AND CAREERS ARE BEST SHAPED.
BEST OF BOTH Choosing between implementing a system of ongoing or occasional formal feedback is not going to produce an effective outcome – opt for both. Consolidate ongoing feedback into a formal performance review meeting that is non-onerous. Establish a clear link between the employee’s performance and the impact it will have on the business success of the manager’s unit. This combination will drive successful performance for all.