Appraisals - what's the point?

The HR community has been buzzing recently, following the announcement that some very large, high profile organisations including Microsoft and Deloitte have abandoned their formal Appraisal Schemes, in favour of on-going performance discussions between managers and their team members. "How sensible!", many people have said. Appraisals are old hat. They are too bureaucratic. They are tick-box exercises that don’t motivate anybody or improve performance. Far better to build frequent informal performance discussions into the normal management routines.

Sounds good, doesn’t it? But I am not so sure... So what is the point of appraisals?

The wise and much-missed Stephen Covey taught us to “start with the end in mind”, i.e. know our objective before doing anything. The Appraisal (or Performance Review) is a management technique whose objective is purely and simply to improve performance. It does this by providing a formal, structured, uninterrupted opportunity to review and discuss an employee’s performance, to set objectives, to establish whether any training or other requirements exist, and to talk about the person’s future aspirations.

Importantly, as the discussion is documented and filed, it can be referred back to at a later date, to assess whether what was agreed actually happened, and whether the plans and goals were implemented. It introduces accountability both for the employee and the manager.

If it is to achieve its objective, the feedback given to the employee must be balanced and constructive, praising the aspects of performance that deserve praise, and offering support in relation to any less satisfactory elements. Crucially, an appraisal must be a two-way conversation, not just an excuse for a protracted monologue on the part of the manager. Communication involves listening as well as speaking; and listening properly is a skill that requires focus, effort and time. A good appraisal provides the opportunity for the manager not just to judge the employee, but also to get a much better understanding of what the employee wants from the job, what motivates him or her, and how best to manage them to optimize performance.

It ain’t what you do, it’s the way that you do it…

Sadly, appraisals can be bureaucratic and pointless – even demotivating – when done badly. I’ve seen some immensely complex schemes over the years which have been virtually useless in terms of improving performance, and have not even served as a means of differentiating between individuals in a selection exercise. Many managers and employees approach the annual appraisal with a sense of “here we go again”, if not downright dread. In fact there was a famous Video Arts film called The Dreaded Appraisal – and rather good it was too.

But because they are often done badly does not mean that appraisals themselves are bad. That would be like concluding that because some recruitment interviews are badly-run, we should scrap interviews and hire people without meeting them first.

What tends to happen is that organizations introduce appraisal schemes with initial enthusiasm, and then, over the years, during which perhaps promises are made and not kept, people become either complacent or disillusioned (or both), and the schemes slide into a form-filling exercise that adds little or no value. Managers forget (or perhaps have never been trained in) the fundamentals of how to provide constructive feedback, how to listen and how to encourage open, honest communication. Employees perceive it as just an opportunity for the manager to find fault or remind them of mistakes they made months ago. If the scheme was ever fit for purpose, it no longer is.

But if you get appraisals right, they can be hugely motivational and constructive.

Getting it right

Preparation is key to success in any endeavour. A logical way to structure the discussion is to start by looking backwards (the “review” bit), moving on to the present (current “competences” or skills if you prefer) and then looking to the future (agreeing development plans and goals). For more detailed tips on how to prepare for an appraisal discussion, click here.

Feedback is one of the crucial aspects of an appraisal that distinguishes it from most day-to-day discussions between managers and their people. Normally, interactions consist of the manager saying something like “How are you getting on with the ABC project, Fred?” and the employee replying “Phase 1 is complete and the client is happy, but we’ve come across a snag…”, to which the manager says: “OK, let me know when it’s sorted”.

Most of the time, in the real world, managers are too busy just keeping on top of their workload to ask Fred whether he is enjoying the job, or to tell him he is doing a good job, or to ask him whether he is interested in learning new skills or moving to a more senior role. They tend to say nothing unless there is a problem, when at best they will deal with it reactively, and at worst they will either bawl at him without giving him a chance to explain, or ignore it and hope it resolves itself because they don’t like confrontation.

What’s more, giving feedback well – particularly when the message is not entirely rosy – is not easy. It requires skill and preparation. It’s unlikely that off-the-cuff conversations about the ABC project will provide constructive, skilful feedback. To find out how to give constructive feedback, click here.

Case Study

When I was first promoted into management about 25 years ago, I had a lady reporting to me who was nearly 30 years my senior. She knew everything there was to know about her job, and did it very well. Although she didn’t say anything, I felt that she was sceptical about what a young whipper-snapper like me was doing in a managerial role. I don’t mind admitting I was daunted at the prospect of carrying out my first appraisal meeting with her.

So I made sure I did it all by the book. Well in advance I checked her job description so I understood her role in detail, and read through her file, including the previous appraisal documents to see what objectives she had been set. About a week before the meeting I sent her a memo (that’s what we did in those days!) inviting her to the meeting, explaining what we would be doing, inviting her to think about anything in particular she wanted to discuss, and attaching a copy of the previous appraisal form to help focus her thoughts. I booked a meeting room so there would be no interruptions, and prior to her arrival I rearranged the furniture to remove the barriers and ensure we were comfortable. I organized water and some glasses, and had all my paperwork ready.

Having set the scene I started by asking her how she perceived she was doing, what aspects of the role she felt she did particularly well, and whether there were any she struggled with, and I took the opportunity to reinforce the positives with real examples that I had observed. We talked about what had gone well and what had not gone quite so well since the last appraisal, and agreed SMART (Specific, Measurable, Agreed, Realistic and Time-bound) objectives for the next six months. I then asked her whether there were any obstacles preventing her from doing the job even better, and whether there was anything I could do to help. She mentioned a couple of minor niggles like a lack of storage for her archive files and some difficulties with the new software system that had been introduced. So I noted them down and over the course of the next couple of weeks I arranged some further training on the software and sourced a new cupboard that suited her needs better.

What I was doing was building credibility and trust. By delivering on my promises, she realized she could trust me to help her do her job better, and from that day onwards, we cemented a successful working relationship that lasted until her retirement.

Ongoing management discussions

In an ideal world, managers are alert to any opportunity to give feedback on performance. And if issues arise, of course they must be addressed promptly. There is nothing worse than saving up all the feedback until the annual appraisal, and then reeling off a catalogue of mistakes, deficiencies or examples of poor performance. It is rightly said that appraisals should contain no surprises (unless they are good ones, like a new cupboard!). If an employee walks out of an appraisal feeling less motivated, less enthusiastic and less committed to the business than when they walked in, then it would have been better not to do it at all.

So yes, ongoing performance discussions are a wonderful idea, but in practice, will they really happen? Without a formal “process” at a set time with a clear structure to follow, will managers find the time and inclination to have deep, focused conversations with their staff on a regular basis, or will the months flash past in the hurly-burly of getting the work done?

Even if these discussions do happen, I maintain that setting aside time for a structured, documented discussion that is prepared for by both sides and undertaken with skill, that focuses not on the day-to-day workload but on the individual carrying out that workload, is still worthwhile. I believe that, done well, an appraisal scheme is a valuable management tool that should not be abandoned lightly.

If you would like to introduce an Appraisal scheme, or overhaul your existing one, get in touch.