Seven ways to get the most from your appraisal

Giving staff annual performance evaluations and appraisals has been widely accepted for decades as an essential and valuable management tool. However, growing research suggests that performance reviews may do more harm than good - and this is linked to the way they are carried out in most organisations.

Are appraisals ineffective?

Here’s a sample of the evidence that the current process isn’t working:

• In a national study by People IQ, 87% of employers and managers felt performance reviews were neither useful nor effective.
• A study by the Society of Human Resource Management found that 90% of performance appraisals are both painful and don’t work; and further, they produce an extremely low percentage of top performance.

Second only to firing an employee, managers rate performance reviews and formal appraisals as the task they dislike the most.

The upshot? Managers and employees both view the process as an unproductive, and often a demoralising waste of time and resources.

Innovation and creative thinking

More impressive performance and appraisal systems are in place today than there were 10 years ago. These systems refer to best practice, link personal objectives to organisational objectives, use competency frameworks, and look at deliverables as well as behaviours.

Significant investment has gone into this process, and the most noticeable improvement is that the compulsory annual performance appraisal conversations do now at least take place, because managers are monitored on this. However, the advancement in HR systems have yet to significantly improve the appraisal experience or its impact.

Practical tips for the perfect review

Here are are seven practical tips to help improve performance reviews:

1. Expectations

Ensure expectations and targets are clear from the outset. You need to be able to describe what ‘good’ looks like.

2. Feedback

Provide feedback on an on-going basis. Regular feedback and conversations about performance and expectations creates clarity, it provides a sense of security and fosters continuous improvement.

3. Changability

Adjust the expectations and objectives when conditions change - the world rarely stands still for 12 months.

4. Training

Train managers to give high quality solution-orientated feedback and how to motivate staff to develop.

5. Positive feedback

Ensure that managers don’t neglect the positive feedback. Positive feedback needs to be genuine and specific, describing what positive performance elements the manager noticed. A ‘well done’ is nice, but without specifics it is not something the employee can learn from.

6. Focus on quality

Improve the quality of the appraisal conversation itself - make sure that the managers are skilled in listening, questioning, giving feedback, and setting SMART goals .

7. Open communication

Don’t surprise your employees with a series of observations that have gone unmentioned. The formal appraisal should be more of a summary of experiences over the preceding period. This enables you and your team member to focus the appraisal conversation on the positive development coaching that will improve the performance going forward.

How to achieve better business results

Does the answer to the performance review conundrum lie in coaching? Should organisations invest in raining leaders as coaches, and empowering managers to become skilled and confident in giving feedback? Research around coaching and performance management by Bersin & Associates has shown that:

• Organisations in which senior leaders coach very frequently had 21% higher business results.
• Organisations with excellent cultural support for coaching had 13% stronger business results.

A coaching leader’s mindset is different from that of a directive leader or manager. When giving feedback they are focused on building capability and helping staff develop and learn. They are more aware of the value of sensitive feedback and constructive appraisals.

The quality of the appraisal conversations themselves will also improve when managers have good coaching competencies. Their ability to listen and build trust will be better, as will their ability to create an open positive learning environment.