Are Annual Appraisals Outdated?

Is once a year really enough to understand how your employees have been and are performing and how they’re feeling about their job and the company?

I get asked the question all the time, “Do staff have to have an annual appraisal?" Usually by frustrated business owners believing it to be a meaningless exercise.

Well, a once-a-year appraisal does give the appearance of being purely a box-ticking exercise so I can understand that frustration. However, what we do know is that a well-conducted employee performance appraisal increases individual performance and has an impact overall on office morale too.

But, is once a year really enough to understand how your employees have been and are performing and how they’re feeling about their job and the company?

In my view, the answer is no.

So…’are you suggesting we do this box-ticking exercise more than once a year’, I hear you cry! Absolutely not, the traditional once-a-year appraisal system is outdated and there are other ways to have more regular, less onerous processes and conversations. 

Before we go there, let’s just consider the benefits of the appraisal before we consider the alternative approach which still carries the same benefits.

1. Employees feel valued

• The appraisal gives you an opportunity to give your staff feedback on the things they’re doing well not just the things they’re not doing so well.
• I can guarantee you that every employee values regular feedback and praise for a job well done. It’s human nature! Positive praise will show them you notice the good work they’re doing, helping them feel valued and motivating them to continue to do the things they do well even better.
• Balance that with honest feedback on the things you’d like them to change or improve and you’re on to a winner with improving staff performance in a way which encourages staff to want to do even better.

2. Set Goals

• Goals keep staff focused so their efforts don’t become confused or disjointed from what they should be achieving. They help staff motivate themselves, measure their progress and oust procrastination.
• The appraisal gives you an opportunity to set goals with your employees which are aligned to what you’re trying to achieve as a business.

3. Discuss Problems

• We all know as leaders we’re often so busy with the day to day that we aren’t always in touch with how our staff are feeling.
• The appraisal is a perfect opportunity to find out. To understand your employee’s frame of mind and talk through any concerns to try to help remove any barriers to great performance.
• It’s surprising what you can learn about your company culture in these conversations too!

4. Cement Great Relationships

• The majority of people don’t leave jobs, they leave managers. This is a common fact.
• Therefore, through the appraisal managers have a great opportunity to further build good relationships with their team.
• Managers can give time to learning about what’s going on with their employees professionally and personally through active listening.
• Not only that but it allows discussion of priorities within the business to align employees to those and the chance for employees to raise things that are important to them in their day to day work.

5. Communicate your Vision

• Use the appraisal to clarify and articulate your vision for the business. What direction do you want to head in and how? It’s a great opportunity to make sure that your team understand what’s in your head and are on the same page

6. Talk Progress

• Employees will always want to talk about their own career opportunities and growth. Whether that’s through training and development or the prospect of future promotion opportunities.
• We all have different strengths and weaknesses so the appraisal is a chance to assess those and discuss where training and development may be required.
• It’s an opportunity to have those honest conversations about career prospects whether these are positives ones or whether the reality of an employee’s abilities and role within the business needs a reality check where your view and their view differs!
• So with all these benefits, is the annual appraisal really just a box-ticking exercise?
• In my view, having these conversations just once per year isn’t enough.
• The discussions that take place will easily get forgotten, and had the feedback given earlier, it would’ve been more relevant, giving the employee the opportunity to make the changes required to adapt their performance in the moment with the business reaping the benefits of that.

Imagine waiting a whole year to find out what your boss really thinks or to even sit down and have a quality conversation about your own role, work and career. As a business, knowing what issues there are early provides opportunity to find resolution and reduce the toxicity that can come from issue being allowed to fester and providing feedback about where an employee needs to improve on a more regular basis will be invaluable to staff and business performance improvement. Managing performance problems will become easier and more consistent too.

So how about these approaches as an alternative to the annual appraisal?

1: Incorporate performance discussions into regular one-to-ones.

Hopefully, you all have regular one-to-ones to check in with your employees, whether it’s their personal well-being, development, goals, or challenges they might be facing.

If you don’t, I’d highly recommend putting these in to place no matter how small your organisation, given the huge benefits to both the business and the employee. Read our short blog on ‘Why one to one’s are a no brainer’ to find out more.

For those of you who do have regular ones to ones, why not incorporate a conversation about how the employee is performing. What are they doing well and not so well with examples and changes you’d like to see. How are they getting on with their goals and are they still appropriate given the changing nature of the business. What support or training do they need?

As you’ll be having these conversations more regularly, the conversation becomes shorter, more relevant, natural, less formal and onerous and changes can be made in real-time making the employee and your business more agile.

2: Quarterly Performance Conversations

Another alternative if you want to retain a process, is to have a conversation once a quarter with a simple pro-forma of questions such as:

• What’s gone well?
• What’s not gone so well?
• Progress made against goals?
• What’s been getting in the way?
• What have you done to get back on track?
• What support d’you need from your manager/company?
• Anything else you’d like to discuss?

In summary, regular conversations around employee performance are always going to be more useful than the outdated annual appraisal process.

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