Performance management – evolution, not revolution

The reputation of the annual appraisal has taken a good kicking over the past few years. Around Christmas, the same articles about the “dreaded” event begin to appear. “It’s the same thing each time”, “They take far too long, “They feel pointless, “They add little value” – these are just some of the common complaints expressed.

In a fast-paced, digital world, having a single sit-down performance review once a year with nothing in between is insane. However, the benefits of setting long-term goals shouldn’t be ignored. There are some things, like career conversations, that make sense to discuss on a longer-term basis. There is also value in taking a step back every so often to reflect on what has worked well and what could be done better. Setting long-term objectives can be very positive and motivational, giving employees something aspirational to aim for.

So, what is the best way forward? There is definite merit in having frequent, regular discussions between line managers and their employees. In fact, according to a 2018 Forrester paper, commissioned by Workday, “those with monthly or continuous performance processes are 1.4 to 1.5 times more effective at engaging and retaining employees than those with annual processes.” In our own research with employees in 2019, we discovered a staggering 84% consider regular check-ins with their line manager to be important[1].

Be true to your culture

So, how do you marry the need for long-term reflection with regular and meaningful discussions? The point about performance management is that there is no one-size-fits-all approach. It requires a nuanced approach that considers the unique needs and culture of your organisation. What works for one business, will not work for another. It’s about listening – to your senior leaders, your employees, and third-party experts – and finessing your approach on a regular basis. It’s about finding your own path and ensuring you take everyone in the business along with you on that journey.

One of our customers, Splash Damage, a British video game developer that has worked on many iconic titles, including Gears of War, Halo, Batman, Doom, Quake, and Wolfenstein, has been such a journey. Since moving on to Appraisd three years ago, the company’s approach has continuously evolved to ensure that it is delivering the benefits of a strong performance culture to employees, managers and HR.

Head of HR, Kate Lindsay, shares her experiences:

Where did the drivers for change come from?

“Our senior leadership team were keen to develop a more effective approach to performance management that could help move us forward as a business, and that better reflected the dynamic, rapidly changing sector that we’re competing in. One of them had read Tim Baker’s “The End of the Performance Review – A New Approach to Appraising Employee Performance”, and was inspired by the messages in it, particularly around creating a more collaborative and cohesive workplace. These chimed with our ambitions as a business and our desire to fuel better, more productive conversations between employees and managers.”

How did employees react to the change?

“Overall, the reaction has been really positive. We introduced monthly conversations as part of our new approach. When we first launched Appraisd, these conversations were designed to focus on a different area every month. This ensures each time feels fresh and the discussion doesn’t go over old ground. However, we have since adapted a simpler approach as we noticed a decline in 1-2-1 conversations.”

“We switched our focus to management training, including how to have conversations and ask ‘good questions’. This approach also ensures that we discuss a range of topics, such as development needs, career progression and wellbeing. With the introduction of self-assessment appraisals, employees feel empowered to have their say. Performance management is something that’s inclusive and collaborative, rather than a one-way conversation from manager to employee. We monitor the conversations and have noticed a marked improvement in the quality of feedback being given. We provide continuous training on this and have been pleased to see more detailed and constructive information being delivered across the business.”

What pain points have you encountered?

“When we first introduced monthly conversations, we included peer reviews. These fed into employees’ overall ratings and were anonymous. As people knew that they could affect their colleague’s ratings, they were often reluctant to complete them. They also felt uncomfortable being too specific in case they could be identified. To rectify this, we have introduced fully transparent 360 reviews, which are working much better. It is now clear who the reviews are from and employees have embraced the opportunity to offer constructive comments.”

“Breaking the link between performance reviews and pay has also been a challenge. It has required us to work with everyone in the business to create a change of mindset. Employees now see performance conversations as opportunities to develop themselves as individuals, not just a way to get a pay rise. It has been hard to make the break but introducing proper promotion and salary review processes has helped to make the change.”

What have you learned along the way?

“It is really important to realise that you don’t have to change everything overnight. Performance management is not something you complete – it is ever-evolving and needs constant attention to ensure it remains as relevant and effective as possible. Not everything you try will work, but that does not mean that you should stop exploring new ideas. We are always thinking about what we can do to improve our approach.”

“The next thing we have planned is skip-level reviews – employee reviews of their managers, that they will give to their manager’s manager. This will help reinforce collaboration within the organisation, give employees access to senior leaders, and demonstrate our commitment to nurturing exceptional management skills throughout the business. We are also just finalising changes to our ratings scale, ensuring the options are as clear and straightforward as possible for managers to select, creating a higher level of consistency across the business.”

“Being agile and always ready to change is at the heart of what we do and has been a key driver in creating an open, friendly and collaborative culture, where employees want to work.”

[1] Survey conducted by OnePoll with 1,000 UK employees working in organisations with 50 employees or more in April 2019.

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