Firstly and most importantly Happy New Year! I hope you are all feeling refreshed after a break with family & friends and ready to jump in to a brand new year full of opportunities for success.

I’ve always loved this time of year for reflection on the past 12 months and looking forward to the next, both at home and at work, often in the guise of the dreaded ‘Annual Appraisal’.

What is an Appraisal?

The act of examining someone or something in order to judge their qualities, success or needs.

Cambridge Dictionary Definition, dictionary.cambridge.org

This definition and really just the term ‘annual appraisal’ makes me a little uncomfortable and here’s why:

• ‘Performance Management’ is not something which should just be done to you. An individual should have active participation in their own performance and development.
• It should not be an annual activity or even just a scheduled activity, performance management and development is something which should be happening all the time.
• Having one or two (mid-year and full year) conversations about performance is not enough.

Annual Appraisals Don’t Work

Theres been a lot of media attention over the past few years to the demise of annual appraisals and the emotional strain of performance rating scales for employees and managers. A lot of this research is solid, evidence based and just makes sense.

BUT, I think the message has been a little lost – it does not mean we don’t need to bother with performance management processes, objectives and conversations with our employees. It means we need to frame them differently and actually embed these conversations into every day management.

I recently had a conversation with a business leader at a large corporation who told me ‘we don’t need to bother setting objectives, I’ve read the research and I know Google and Accenture got rid of their appraisal systems, why can’t we?”. My answer was twofold.. firstly Accenture and Google both removed their traditional ratings – yes but neither stopped managing their employees, in fact they both moved to far more regular, less formal management styles, and by the way Google still have a rating scale, they just apply and use it in a different way, twice a year. Lastly and most importantly, do you have confidence that all the leaders and managers across the organisation regularly sit down with their teams and discuss performance? If we removed the annual process, would your employees ever be spoken to about their goals, performance and ambitions? If the answer to this is anything other than “absolutely, of course” then removing all processes probably isn’t what you need, instead think about developing your leaders and fostering a culture where feedback happens every day.

Managing Performance the 2019 Way

If you’re currently creating or have finished your business plan for 2019, share it! There may be some parts you need to keep confidential (if there’s an acquisition in the pipeline or significant change) but on the whole, its great for your team to know where you’re heading and feel that they can and will be part of the journey with you.

In small businesses, its sometimes easy to assume everyone knows everything, but often a team of 5 can all have slightly different snippets of the same picture and end up with a totally different impression. Take an hour out and make sure everyone knows exactly what you hope to achieve this year. You may even uncover some skills and experience in your team to get there faster than you thought.

Once everyone knows which road the business is taking, ask your team to come up with 3-5 ways they can help you get there. Generally, I prefer a quarterly approach to objective setting with maybe 1 or 2 longer reaching goals where relevant. Start off generic but them make them SMART! There’s nothing more frustrating than trying to figure out if someone “learned about finances” at the end of the year.

Once all the objectives are agreed, set up regular (usually 1 – 4 weekly) 121 meetings to review – How’s every day work? How are the objectives going? Are they all still relevant and achievable? Do either of us need more support? Its your chance to say ‘well done’ and ‘thank you’ and also address any concerns as and when they happen – not 6 months later. Don’t forget, the objectives are live and should be adding value and importance almost every day, if they’re not, don’t be afraid to take a fresh look.

If you would like to discuss in more detail, ask a question or are interested in developing a bespoke performance management process for your business, get in touch with us today.