Performance Appraisal is that occasion when once a year you find out who claims sovereignty over you.

Peter Block

Your workforce is your lifeblood. Just as blood nourishes every organ in the body, your people feed every aspect of your business. Without the right people, your firm is going to struggle.

Why then do so many companies treat performance management as an annual event?

It follows that the more frequently your staff receive feedback, the better able they’ll be to develop in their role.

Think of an appraisal like an MOT. It’s at its most accurate the day of the test but as time goes on, new issues arise, and come the end of the year there’s every chance the original MOT bears no resemblance to the car on the garage forecourt.

Research backs this up and shows that quarterly appraisals significantly increases the productivity of companies.

Performance management: How not to do it. 

Performance management is a systematic process that identifies, measures, and develops the strengths and weaknesses of each employee.

However, there’s little point in using performance management if you’re not going to do so effectively.

Many organisations use reviews to weed out poor performers. This usually manifests as line managers being told to create a paper trail to justify firing the employee. There’s nothing wrong with this per se, as it’s unwise to make moves to remove or redeploy underperformers without a formal system. But, when performance management is used for this purpose exclusively significant value is lost.

The opposite approach is just as fruitless. When organisations routinely grade every employee as ‘excellent’ in all but one area (which, nine times out of ten, is graded as ‘good’). Obviously, these grades don’t reflect reality and diminish the contribution of the true star performers. This sort of thing breeds conflict, as the top performers feel aggrieved and the average to poor colleagues feel justified in their (lack of) effort. After all, their manager says they’re doing an ‘excellent’ job…

What does a good performance management system look like?

There are loads of ways to make performance management worthwhile. You’re onto a winner if you do anything to take it away from being a pointless box-ticking exercise or disciplinary tool.

How you structure and implement performance management will be informed by your company’s organisation and culture. What works for one firm won’t necessarily work for another; breaking out the beanbags and fruit smoothies probably won’t go down too well in a professional law firm. Likewise, a suit-and-tie meeting over a desk in a closed office would feel out of place in a creative agency.

At its core, good performance management is about developing your people. Yes, you do need to have a tool to pick up underperformers and protect your company should you need to part ways. But, this should be secondary to giving them a rounded view of their performance.  Celebrate strengths, identify weaknesses, and collaborate to decide on actions moving forwards.

360 Performance Management Reviews

360-degree performance management reviews are powerful. They provide the subject with a picture of their performance from all the people who matter. Not only that, when people know that feedback will be coming from several directions they’re more likely to be honest.

This honest feedback from multiple sources provides evidence that strengthens the manager’s decisions. When carried out regularly, they provide an accurate appraisal of areas for improvement that can be rectified with mentoring. Should no improvement be seen, the case for sanction or dismissal is clear, as it’s based on more than the opinion of one individual.

Probation Reviews

People lie on their CV and at interview. References can be bland or misleading. Hiring managers make mistakes. Therefore, probation reviews should be an essential part of performance management.

There can even be problems with genuinely impressive candidates. These are usually cultural, for example, a senior hire may have performed excellently in an aggressive, assertive environment. However, if they were to find themselves in a more collaborative setting, they might struggle. There’s no attempt at deception here, it’s just a case of poor cultural fit that only becomes apparent when the individual is working in the role.

If a probation review isn’t done, most contracts allow problematic employees to become firm fixtures in the organisation. And that’s something that’s not conducive to your success.

Appraisals

Of all the performance management tools, appraisals are most likely to end up as a box-ticking exercise.

They require large amounts of data and line managers find this time consuming and bureaucratic. This leads to incomplete data that does little to show the true ability of each employee.

Automation can do a lot to clear the administrative logjam, freeing up managers to spend more time on the important bit- actually appraising performance.

When a manager is free to deploy their professional skills, they’re able to use appraisals to craft bespoke plans for their team members. For example, an HR manager with a weak understanding of a specific element of employment law particularly relevant to the business could be sent on a course to build up their knowledge. Or, a top-performing sales rep could have their performance boosted further with one-to-one mentoring from the MD.

Getting the administration right allows low performers to be weeded out and high flyers to be identified. Performance management is a human activity but one that can be complemented by technology.

Group Talent Review

Performance management can be more than just a one-to-one conversation between boss and employee.

Group talent reviews are a potent addition to your appraisals and 360-degree review.

When you gather your experienced management and HR teams together you get an overview of how individual performance affects the whole company. From there it’s easy to identify performers and make sure that they were retained through cross-department promotion and reward.

Similarly, low performers are picked up. Then, you can draw upon the combined expertise in the room to work out how best to manage the situation. This could be by redeployment to a more suitable role, additional training, or mentoring from someone detached from their immediate team. Failing that, options for ‘counselling out’ rather than firing can be considered. When the system identifies a need for their removal, it’s better to do so in a caring and constructive fashion. Multiple senior heads working on the same problem makes this outcome more likely.

Performance management is key to organisational success

Simply put, companies where employees revise or review their goals quarterly or more frequently perform better.

Effective performance management removes poor performers who would otherwise have stayed in situ, identifies high performers who might otherwise be overlooked, and provides development advice to employees at critical times in their careers.

Would Andy Murray be one of the most successful British tennis players of all time if he was only given direction, feedback, and development once a year?

No. He wouldn’t.

Want to improve performance management in your company?

We can help you put the soul and energy back into your performance management conversations.

By the end of the workshop, you’ll have the tools you need to make time for these crucial conversations, banish any anxiety, and turn performance management into something truly transformational.

Sound interesting? Fill in a contact form and we’ll be in touch.