Is it time to can per­for­mance re­views?

Finweek English Edition - - INSIGHT - BY MARGIE SUTHER­LAND

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.


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.

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