Why Annual Appraisals Don't Work!

Performance appraisal, annual review, performance evaluation, employee appraisal. Just some of the phrases for an employee’s performance to be documented and evaluated.

Viewed by employee’s as time wasted on rankings and performance management procedures. According to recent research, annual performance review’s is the 2nd most disliked activity by manager, with 1^st being firing people. No shock there.

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Why they fail?

The manager/ratter (is that a word?). This is because the scoring is subjective and from the perspective of the person rating.  Typically speaking a knowledge workers outcome is harder to define and measure compared to let’s say a manufacturing workers activity for example as this can be easier to quantify. Employees are likely to disengage once rated and will be negatively affected moving forward.

Frequency. With annual reviews being what they are, annual, there’s a rather large chance it will go unnoticed that an employee is disengaged with the business. It is likely they will look to move on to a new venture or worse, stay and under perform.

How to over come this?

1 – Road Mapping – Measure factors that drive performance. Ideally the employee and manager should agree on a small number of specific, unambiguous, actions points (three to five objectives ideal), which are followed up periodically throughout the year.

2 – Regular Communication – Many companies are adopting a more regular “check-in” approach of around once a week instead of annual appraisals. This gives the opportunity to give feedback and coach people into the right direction as well as goal planning and meaningful feedback to identify issues and actions.

3. – Simplify – Google acknowledged their appraisal process was outdated and implemented a new system. They rate their employees on a five-point scale, which ranges from ‘needs improvement’ to ‘superb’. From this they use objective key results, also known as OKR’s, this is a simple tool to create alignment and engagement around measurable goals.

Effective performance management drives engagement which in turn drives performance.