Rewards & BenefitsEmployee BenefitsWhy annual appraisals need to end

Why annual appraisals need to end

There’s been plenty written about why appraisals don’t work. I won’t go over old ground, but in case you missed it, they don’t improve performance and both managers and staff dislike them! So the big question is, what to do instead?

As a replacement for appraisals, some forward-thinking organisations have moved to a model based on continuous performance management, encouraged by the findings of leading academics. At its heart, this approach uses regular, meaningful, performance and development conversations, combined with real-time feedback.

However, most organisations are yet to make the shift away from appraisals. Why is that?

Making it work in the real world

When we talk to HR professionals, they tell us that they want to adopt a culture of continuous performance conversations, but they are concerned about making the change and are uncertain about how to make it work in practice. These fears are understandable given there is little available information to answer important questions such as how to get managers and staff to engage in regular performance dialogue and how to handle pay and promotions without the yardstick provided by annual appraisals.

Experience has shown us that it is possible to successfully replace appraisals with an on-going, year-round process that is easier and more fulfilling for both manager and staff. However, we can’t ignore the fact that some organisations have tried to embed regular performance conversations and failed to get traction. The common factor is that they didn’t have the appropriate technology to support their new approach.

So why is technology so vital in the new world of performance management? To understand that, we need to delve a little into human psychology.

Encouraging new Behaviours

Dr B J Fogg, the Director of the Behavior Design Lab at Stanford University has developed a model to understand what drives our actions as humans. It is represented by the formula:

B=MAT

Behaviour = Motivation + Ability + Trigger

A desired Behaviour will only occur when Motivation, Ability and a Trigger are present at the same time in sufficient degrees.

Motivation

From a performance management perspective, if we want people to have regular conversations and give frequent feedback, we can help drive the Motivation part of the formula through communication and training workshops so that both staff and managers understand the benefits to themselves and the organisation as a whole.  However, to properly fulfil the Ability and Trigger elements of this formula, we need technology.

Ability

Fogg defines Ability as an individual’s capacity to do something at a given time, which is influenced by a number of factors including:

  • Time – how long it takes to complete the action
  • Brain cycles – the level of mental effort and focus required to take the action
  • Disruption – how much the action disrupts existing routines

The easier the action, the more likely the user is to do it

With this in mind, consider the steps a manager might take in preparing for a one to one check-in conversation without dedicated technology to help. For example, finding notes, thinking about what to discuss and what kind of questions would work, track down the person’s objectives, trawl through emails for feedback, the list goes on.

Such a process fails the Fogg ability test on all three counts – the Time and Brain Cycles required and the level of Disruption to the individual’s routine. So much so that only the most motivated of managers will do this regularly.

Triggers

Technology is the ideal way to provide automated triggers, such as emails or notification badges, in a way that a manual process simply can’t. Without these triggers an individual is unlikely to take action until they have formed a new habit.

When you use the right technology

A performance management platform can automate the process of preparing for a check-in conversation significantly.  The manager clicks one button and has a check-in meeting ready to go with suggested prompts for discussion, notes from the last meeting, the individual’s current objectives and status and recent feedback, all on hand to discuss. It can be quick, simple and effective.

The same goes for giving feedback. If you provide technology to employees that enables them to give feedback in-the-moment in a couple of taps from their mobile phone, they will be much more likely to do it.

This is not just theory, it really does work in practice too. Clydesdale & Yorkshire Banking Group adopted a continuous performance management approach last October. In only the first 6 months, their 6,500 staff had over 15,000 check-in conversations and gave over 75,000 pieces of feedback.

Elissa McKinlay, Area Manager, Customer Banking said; “A fantastic system that is transforming performance discussions! A really positive step forward.”

Kerry Bircumshaw, Bank Manager; “I love it, it adds real structure and I look forward to receiving and giving feedback. Thank you for the change, making a real difference.”

About the author

Stuart Hearn, founder & CEO, Clear Review

Stuart is an experienced performance management consultant, writer, speaker and former HR Director with over 20 years’ experience in Human Resources, specialising in Performance Management and HR technology.

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