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Appraisals – are they really an outdated institution?

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18th May 2016
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We recently attended an HR event where the theme of the day was ‘facing the future with courage’. There was a general consensus that the world of work is changing and therefore so should our approach to HR. Everyone seemed on board with the idea that we should be looking forward with an open mind and embracing new ideas.

But then we turned to the subject of appraisals...

This group of HR and L&D managers, who were so open to ‘facing the future with courage’, largely acknowledged that their appraisal processes had remained unchanged for years.

Some shared that both employees and managers dreaded it in equal measure, that it was incredibly time consuming (when done at all!) and actually, they were not really sure what the overall purpose of their appraisal system was.

If the subject of appraisals prompts such reaction, isn’t it about time we took a step back and asked what it’s really all about? Here are a few questions you should ask about the approach to appraisals in your organisation…

Your appraisal system – what’s its overall purpose?

If the answer hasn’t immediately sprung to mind, then the purpose probably isn’t very clear. Your appraisal system may have been in place for so long that no one can remember what its purpose was in the first place.

Put aside your current approach for a moment and ask yourself what your organisation wants its appraisals to achieve.

For example, is it to measure contribution of employees to financial growth? Is it to encourage open and honest dialogue or is it to map future career development?Or something else entirely?

Once you’re clear on your purpose, it should naturally follow that some approaches will support it and some won’t.

If your workforce is largely made up of millennials (or if certain business units are) then a more formal appraisal approach may not be particularly effective.

For example, if your overall purpose is to encourage open and honest dialogue between your employees and their line managers, then having salary increases or a bonus linked to the appraisal might not be conducive to that purpose.

Employees will inevitably want to ‘sell’ their achievements and performance and the line manager might not want to be responsible for them not getting a pay increase or a bonus.

If, however, the overall purpose of your appraisal system is to encourage effective teamworking, then asking focused questions that draw out practical examples of teamwork in action or seeking "360 degree" feedback from the wider team may be more effective.

Does your approach to appraisals reflect the overall values and culture of your organisation?

There has been a real shift over the past couple of years in organisations talking more openly about their values and what’s important to them (beyond just making a profit).

The culture of an organisation is often as important to employees as their salary and can have a significant impact on recruitment and retention rates. 

Shouldn’t this therefore be reflected in approaches to appraisals too?  Does your appraisal process sit comfortably with what’s really important to your organisation? For example, does it focus on individual contributions when your ethos is all about working together? 

Put aside your current appraisal approach for a moment and ask yourself what your organisation wants its appraisals to achieve.

Appraisals could also be an opportunity to find out how the employee feels about the culture of the organisation, how they contribute to it and how they demonstrate the organisation’s values. Do your employees even understand what the organisation’s values are? 

Do you actively coach or train managers on how, when and where to carry out appraisal discussions?

Again, this ties in with being clear on the overall purpose of your appraisals.

If you are trying to achieve open and honest dialogue with your employees, then do you actively encourage managers to hold appraisal discussions in a way that is conducive to a relaxed and open conversation? 

If your employees aren’t office workers, should you be holding an office-based discussion? If your employee is a driver, a chef in a restaurant or a farm worker, have you thought of stepping into their normal working environment instead? Ask where they’d feel most comfortable.

If your managers don’t understand the overall purpose of your appraisals, they’re not going to carry out an effective appraisal that meets that purpose.

Involve your managers in discussions about why they’re doing this in the first place, so they’re clear on what you want the organisation and the employee to get out of it.

There’s some fascinating commentary on the HR implications of neuroscientific research, showing how traditional approaches to appraisal discussions can effectively ‘dull the brain’ and trigger a closed response from the employee.

This information might really help to work out a constructive approach.

Do you know how your employees feel about your appraisal process?

Whatever your current approach to appraisals, do you know how your staff actually feel about it? It is better to know if your staff dread appraisal discussions or see them as a waste of time (then it’s clear something needs to change). 

If you decide to redesign your approach, then why not involve your staff and get their input. If you have an employee forum, could you use that to brain storm some fresh ideas? 

This brings us back to the purpose again. You can’t get meaningful input from your staff unless you’re clear on what you’re trying to achieve and you’ve communicated this to them.

Do you need a formal appraisal system at all?

We’re increasingly hearing of large corporates ditching their formal appraisal systems (along with rating systems and forced timelines) and opting for a more fluid and real-time feedback approach.

The traditional approach of yearly or six-monthly appraisal discussions may be completely irrelevant within your organisation and not reflect the rhythms or cycles of your business.

Once you know what you’re trying to achieve, ask ‘what would really work?’

The answer may not be the same for every part of your organisation. Does it really matter if you don’t have a uniform approach across the whole workforce? It might be more effective to have different approaches across different business units or even across categories of job roles.

Think about your workforce demographic too.

If your workforce is largely made up of millennials (or if certain business units are) then a more formal appraisal approach may not be particularly effective.

One business we work with has dropped the formal appraisal interview and replaced it with a conversational approach. To try to open up a meaningful dialogue with the employee, a few key questions have been designed, including: 

  • Are you happy in your role with us?
  • How can we support you to grow?
  • Would you recommend our business as a place to work?

If you’re speaking to the employee in an open way and in an environment they’re comfortable with, you should get some really meaningful input with these sorts of questions.

Final food for thought…

Whichever approach you take to appraisals, do keep some sort of record of what is discussed.

This doesn’t have to be a formal document – it can be light touch, such as an informal follow up email from the manager to the employee.

You can then demonstrate what’s been discussed if there is ever a reason to refer back to it.

There is no ‘one size fits all’ approach to appraisals. What works for one organisation may not work for yours.

However, it is worth just taking a step back from your current approach and asking the above questions, starting with the key question of ‘What’s the overall purpose?’

Once that’s clear, you’re already halfway there.

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