Are performance reviews outdated?

Yes! No one looks forward to an annual performance review. Only 5 percent of managers are happy with the traditional yearly approach. Annual performance reviews are nerve-wracking and awkward for everyone, and the process is, at best inefficient. Almost 90 percent of HR leaders say annual performance reviews don't provide accurate results. It's undeniable that the old school, annual performance review is not fit for purpose, and forward-thinking organizations are now creating new strategies to evaluate employee performance.

How do you start improving performance appraisals?

If managed well, the performance appraisal process can help leaders increase workforce productivity and create high-performing teams. An effective performance appraisal process evaluates employee work performance and reviews goals and objectives during the review period, rather than just annually. To get the ball rolling, business and HR leaders need to establish and agree on performance standards and then regularly check in with people to monitor progress so that the whole process can be used as a tool for development.

What are the key elements of a good performance appraisal?

People are the biggest assets in any organization, so an efficient and competitive human capital management process is needed to develop them and their skills. An effective people performance appraisal system must have clearly defined goals in place to achieve objectives, which need to be specific, clearly defined, and measurable. Continuous, measured, and accurate feedback is a must if people are to stay motivated. The process should be built around flexibility, self-evaluation, and improvement plans, as well as appropriate rewards and recognition.

Are you using these Top 5 excuses for your outdated performance appraisal process?

Global

from Unit4 Communications June 10, 2022 | 4 min read

We're giving you ammunition to counter the top 5 excuses we hear the most about not updating the costly, subjective, and time-consuming process.

Many CHROs and HR directors have been trying to get rid of the traditional performance approach to annual performance reviews for years. They know they're not effective; everyone hates doing them and hates getting them, but they're stuck to the process like gum on a high school desk. All organizations bring their own excuses to the table as to why they cannot update their performance management process. We've implemented Unit4 Talent Management for no less than 900,000 users, and while many of the organizations might have had the same silly excuses at first, they are happy they took the plunge with us. The goal of this blog is to give you the ammunition needed to counter the top 5 excuses we hear the most about not updating the costly, subjective, and time-consuming process.

Excuse 1: My management board doesn't see any value

This is a power play. Your management board might not believe in working towards creating an engaged workforce or a feedback culture. They most likely don't see any value because they don't see any problems. Chances are that you will have to prove that your organization is facing challenges, and you need to solve them as soon as possible. From our own experience, we know that starting with engagement pulses to get the management on board is your best move.

Unless your organization screams unicorns and rainbows, these engagement pulses will reveal issues such as low retention, disengagement, or misalignment. Show the management these results to make them realize people expect changes to happen.

Learn more about employee lifetime value here.

Excuse 2: It's too much change at once

I'm pretty sure you nodded when you read that one. You've heard it many times: "It won't work, we need to change too much to make it a success," or "too much time and effort go into realizing such changes." Let's get real. Will you need to invest some of your time in coaching people? Sure. But will it create a highly engaging and performing culture? That's a double yes. What's the counterargument? You being stuck Are you stuck with an HRM performance appraisal tool that doesn't really do the job for performance management? The effort will be worth the benefits.

We've helped more than 140 organizations change their performance management, and none of them turned all their processes around overnight. Our approach is to start small and learn to scale up without overwhelming your people.

Excuse 3: Our culture is not ready yet

This one probably takes the lead as excuses we've heard the most. Unless you have a specific case that can prove your culture isn't ready, or you cannot change your culture even the tiniest bit, it's not the strongest argument.

We've seen many organizations that did not have a great feedback culture or amazing manager-employee communication system, but we were still able to successfully implement performance management changes.

We swear there was no magic involved. Wondering how we did it without the help of everyone's favorite wizard? We don't force any change on anyone. We work step by step. Start small, don't wait until the yearly appraisal because that will raise a lot of questions just when everything is already very stressful. Start slowly with the changes you feel are the most secure.

So, if your fear is that your culture isn't ready, don't worry; we'll make it ready.

Excuse 4: We don't need a software to manage our HR processes

This one is often aired with great confidence. If you say that changing people's behavior with only software won't work, we're 100% with you on that. However, leaders can have a significant impact on the culture and values of an organization. What makes a good leader is the capacity to adapt to their environment. This implies that leadership is not a static practice but rather a fluid one that should adapt and evolve depending on the evolution of your team.

To support their teams, leaders need a support mechanism. You probably already see it coming; they need a performance management tool! A team leader or manager has to evaluate and decide on the right approach, but this duty becomes more complicated when teams work together across functions and locations or when the number of team members is high.

Gathering data in an intuitive way supports leaders in making objective decisions.

Managers only have a few aspects they can focus on, but this allows them to get a full view of how their team members are performing and can, therefore, assess them better.

Having a tool that guides you is key to success. Our secret is user filters. These allow you to go beyond teams and classify your users/employees according to roles, seniority on the job, location, or any other option you have in mind.

Excuse 5: Risk and compliance are a struggle

Did you get a shiver down your spine when reading that title? We're not going to lie; we felt it too.

When you pitch a new tool, your data security officer or privacy security officer will probably ask about 200 questions about whether the organization's data will be safe. Does the vendor have the right certificates? What about GDPR compliance? Do they run vulnerability tests? Yes, yes, a hundred times yes. You are not the first one asking us these questions. We have done many implementations and have security teams that are trained in protecting your data. We know what we are doing, and we know what you need.

If you have uttered these excuses yourself or heard them, but you see great value (and you should) in updating your yearly appraisal approach, let’s talk.

FAQ sections:

Are performance reviews outdated?
Yes! No one looks forward to an annual performance review. Only 5 percent of managers are happy with the traditional yearly approach. Annual performance reviews are nerve-wracking and awkward for everyone, and the process is, at best inefficient. Almost 90 percent of HR leaders say annual performance reviews don't provide accurate results. It's undeniable that the old school, annual performance review is not fit for purpose, and forward-thinking organizations are now creating new strategies to evaluate employee performance.
How do you start improving performance appraisals?
If managed well, the performance appraisal process can help leaders increase workforce productivity and create high-performing teams. An effective performance appraisal process evaluates employee work performance and reviews goals and objectives during the review period, rather than just annually. To get the ball rolling, business and HR leaders need to establish and agree on performance standards and then regularly check in with people to monitor progress so that the whole process can be used as a tool for development.
What are the key elements of a good performance appraisal?
People are the biggest assets in any organization, so an efficient and competitive human capital management process is needed to develop them and their skills. An effective people performance appraisal system must have clearly defined goals in place to achieve objectives, which need to be specific, clearly defined, and measurable. Continuous, measured, and accurate feedback is a must if people are to stay motivated. The process should be built around flexibility, self-evaluation, and improvement plans, as well as appropriate rewards and recognition.