Should performance snapshots replace annual appraisals?

Shutterstock

Most organisations continue to use annual performance reviews, despite their flaws. Nick Gallimore explains why frequent ‘snapshots’ may provide a more accurate picture of employee performance and keep staff engaged with the process.

Annu­al assess­ments can be ​“wild­ly inac­cu­rate”, even ​“soul-crush­ing”, quoted a BBC article in 2019. For many, the term ​“per­for­mance man­age­ment” is associated with the dread­ed annu­al per­for­mance appraisal. Many cringe at the term, which isn’t surprising.

Annu­al per­for­mance reviews or appraisals have many flaws and yet so many companies use them – a 2018 sur­vey by World at Work found that 80% of com­pa­nies still used for­mal per­for­mance reviews.

They exist because many companies need the out­comes of the per­for­mance review process, although they’d pre­fer to get these out­comes by a bet­ter method.

Tra­di­tion­al per­for­mance reviews had four major weaknesses:

  • They were bureau­crat­ic and time-con­sum­ing and there­fore unpop­u­lar with man­agers and employ­ees alike.
  • Employ­ees dis­liked the tick-box exer­cise of receiv­ing a per­for­mance rat­ing, which distilled a year’s worth of work into a sin­gle label or num­ber.
  • There was an issue with recen­cy bias where­by an employee’s recent achieve­ments (or fail­ures) skewed the judge­ment of their man­ag­er. This lured savvy employ­ees to ​‘gam­i­fy’ the process which further dis­tort­ed the results and led to inef­fec­tive and unfair out­comes.
  • Evi­dence has shown per­for­mance rat­ings have no rela­tion to orga­ni­sa­tion­al per­for­mance. This was evi­denced in a NeuroLeadership Institute report which gath­ered more than 23,000 employ­ee ratings from 40 com­pa­nies and found no sign that rat­ings had any effect on prof­its or loss­es, reach­ing the damn­ing con­clu­sion that ​“per­for­mance rat­ings have no rela­tion to orga­ni­sa­tion­al per­for­mance whatsoever”.

Giv­en these sig­nif­i­cant flaws, why have per­for­mance reviews con­tin­ued to sur­vive in 80% of companies? Per­for­mance reviews are hard for organ­i­sa­tions to dump because they ful­fil two key purposes: they pro­vide the forum for a ded­i­cat­ed dis­cus­sion about an individual’s per­for­mance and devel­op­ment, and they enable employ­ee per­for­mance to be mea­sured and assessed. So, though they may be flawed, they are bet­ter than nothing.

An alternative

Many organ­i­sa­tions can solve this conun­drum by adopting a con­tin­u­ous per­for­mance man­age­ment approach. Data can be gath­ered from the inter­ac­tions staff have had with their man­ag­er over the last 12 months, includ­ing check-in con­ver­sa­tions, goals, and real-time feed­back.

Adopt­ing a con­tin­u­ous approach means that man­agers and employ­ees have check-in dis­cus­sions frequent­ly through­out the year, pro­vid­ing a reg­u­lar forum for  dis­cus­sion about an individual’s performance and devel­op­ment. At the end of the year they can use the data gath­ered from these discus­sions to com­plete a tar­get­ed performance snapshot. This pos­es a small num­ber of specific questions to iden­ti­fy key employ­ee met­rics around per­for­mance, top tal­ent, pro­mo­tion readi­ness or suc­ces­sion plan­ning.

Adopt­ing a con­tin­u­ous approach means that man­agers and employ­ees have check-in dis­cus­sions frequent­ly through­out the year, pro­vid­ing a reg­u­lar forum for  dis­cus­sion about an individual’s performance and devel­op­ment.”

Employ­ee per­for­mance can be mea­sured and assessed based on infor­ma­tion served up by technology. This means that organ­i­sa­tions can make fair, fact-based deci­sions on staff ratings.

The outcome is a sim­pler, more engag­ing process which dri­ves high per­for­mance and engage­ment from the employee, while deliv­er­ing cred­i­ble, mea­sur­able met­rics based on evi­dence built up through reg­u­lar check-ins.

Most staff would be hap­py with this new sys­tem, as it is easy to under­stand and should give a fair­er pic­ture of their per­for­mance. Employers must com­mu­ni­cate any changes to performance management structures as ear­ly as pos­si­ble and explain why they are mak­ing the changes.

HR Director opportunities on Personnel Today


Browse more HR director jobs

Nick Gallimore

About Nick Gallimore

Nick Gallimore is managing director at Clear Review, an employee engagement software company.

One Response to Should performance snapshots replace annual appraisals?

  1. Avatar
    Richard 24 May 2021 at 3:44 pm #

    Doesn’t really give explicit information to understand how it works + nothing to back up the claim that ‘Most staff would be hap­py with this new sys­tem, as it is easy to under­stand and should give a fair­er pic­ture of their per­for­mance’. On the face of it I suspect most would not like the more constant monitoring and assessment approach indicated here. This seems purely an article to help Nick’s business so should it really be promoted by Personnel Today, especially when it is such a poor article?

Leave a Reply