If your organisation is still carrying out traditional annual performance reviews, stop. You’re wasting time and money, and possibly being counter-productive.
I’m talking about those painful, annual formal meetings that managers and their employees usually loathe. Set questions are mechanically asked and scores given to determine bonuses. More “advanced” systems incorporate staff asking questions or outlining what professional development they need over the coming year
If you’ve moved on from that archaic and ineffective system, it is still worth looking at whether your new performance management system is meeting your needs. Simply abandoning performance management is fool-hardy. If anything, in this fast-paced business world where organisations need to be agile, performance management is more important than ever before.
The problem with old school annual reviews is that the feedback given is often a surprise to the recipient, due to the lack of regular, timely feedback. Whether you are managing poor performance or boosting performance, a once or twice a year conversation is not often enough. If the review is negative, and there isn’t another one for six or 12 months, there is often a decline in an employee’s performance during the coming year.
The other problem is that mechanical box ticking processes can be manipulated by either party. Both parties see it as a task to get through and staff often see them as one-way. (Watch the very funny episode of the ABC TV series Utopia for a classic example of this.)
What to do instead?
In 2015, Deloitte Australia announced it was ditching individual performance reviews in favour of giving weekly 10-minute catch-ups with each team member and coaching. This is a step in the right direction. Timely feedback is impactful. Consistent feedback gives you more of the behaviour you want and allows you to nip problems in the bud.
Some other key features to consider.
- Be clear on the point of a performance management system. It should be a tool that helps develop people to get the best out of them. For managers, it should be an opportunity to reward or change team member behaviour to meet business objectives.
- Train managers to manage performance. Most organisations have done little to equip managers or team members with the skills required to execute effective, two-way, performance appraisals. Line managers need to see the benefit of and feel confident to make time each week to provide feedback and coach team members.
- Make the staff member the hero. They need to take ownership of their own performance and professional development and commit to continual improvement.
- Make it positive. Celebrate milestones and achievements rather than continually looking at the performance deficits. Research shows that positive annual reviews lift performance in the coming year but negative reviews can decrease performance even further.