Are Annual Performance Appraisals Enough?

Are Annual Performance Appraisals Enough?

Every organization has its own views and opinions on performance appraisals, how frequently they should be performed, and if they’re even effective in today’s modern workplace. In the 2017 Workforce Management Trends report, 78% of executives surveyed said their organization still relies on annual feedback, but is an annual review frequent enough to be effective?

General Electric (GE) has become a trailblazer when it comes to steering away from performance appraisals. After more than 30 years, “the company decided to scrap formal annual reviews for its 300,000 employees entirely, replacing these evaluations with more frequent conversations”. Other prominent organizations, such as Microsoft and Adobe, have also chosen to conduct assessments that are more consistent, in hopes of improving employee engagement and satisfaction.

Backward-Looking Performance Appraisal Processes
Organizations that continue to utilize yearly performance reviews must consider that as the workplace continues to evolve at a rapid pace, an annual performance appraisal cycle will become outdated. Today’s workplace does not run on an annual cycle anymore. The VP of HR for Adobe referred to annual appraisals as “a process that looks in the rear-view mirror, that’s focused on what you’ve done a year ago. That just isn’t current with how I think we’re working and how many of the employees that we’re looking to attract have been raised.”

It’s essential for management to consider its current and future employees when it comes to feedback regarding their work ethic. If department heads and managers are discussing an employee’s performance historically over the past year, it may be too late for an employee to receive relevant, constructive criticism or positive feedback that can help them grow into their position. By that time, the employee may have begun considering other employment options. For example, if you received criticism or compliments for events taking place last year, would that be helpful for you in your position? This question alone should cause executives to consider a different performance appraisal technique.

Forward Looking Performance Appraisals 
It’s important for employees to be aware of what’s expected of them over the course of the next month or quarter, and what they can expect from their managers. To streamline the performance appraisal process, Goal and Performance Management Software has been created to define objectives, monitor employee progress, and ensure everyone is on the page in terms of how their goals and objectives roll up to the mission of the organization overall.

It is important to note that effective performance appraisal techniques will vary between organizations. The optimal frequency, importance, and magnitude of a performance appraisal will depend on the people, process, and systems in place. However, the overall messaging remains the same: It is essential for employees to understand, in a timely manner, how they are performing, what is expected of them, what steps they can take to excel and grow in their position, and what they can expect in return from the organization.

This DATIS Blog was written by Stephanie Kaselis, DATIS, on March 9th, 2017 and may not be re-posted without permission.

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