Annual appraisals

Research stresses the importance of a positive relationship between individuals and line managers. Carried out sensitively, the annual performance appraisal can be an important way of developing and maintaining this relationship.

A performance appraisal (or review) enables individual employees and their manager(s) to engage in a dialogue about their performance, development, and the support they need in their role, both assessing recent performance and focusing on future objectives, opportunities and resources needed. There is some indication that such annual appraisals are falling out of favour. In India, Microsoft abandoned individual performance ratings. Instead, line managers sit down with their staff for ‘connect conversations’ to discuss their impact, aspirations and what the company can do to support them. To assess impact, employees are asked:

• what they believe they’ve achieved 

• what they’ve learned from others, and 

• what they’ve given to others.

Microsoft – voted the world’s most attractive employer in the 2015 Randstad Award survey – encourages employees to use the meeting with their manager as an opportunity to discuss anything about their work, good or bad. This lets people know their opinions are taken seriously, and that they can keep growing with Microsoft – not just up the career ladder, but also exploring opportunities to move in different directions or fulfil personal ambitions.

But while abandoning the annual appraisal might be popular and save organisational time there remains a need to ensure employee contribution to high levels of organisational performance is improved, and annual appraisals are still used by most organisations.

The content of the appraisal interview is generally based on performance measures derived from an analysis of the employee’s work and the characteristics required for their particular job e.g. job description, key competencies, key results areas and accountabilities.

However, there has been a shift away from measuring individual output to a greater emphasis on individuals’ contribution to overall organisational objectives through behaviour and capability:

performance management generally is now as much about driving engagement, with collecting information and data; less about individuals’ outputs than about providing better insight into the drivers of performance.

Any method chosen should fit in with the ethos of the organisation and bear in mind the need to:

keep it simple – the more time it takes to fill out forms, the more resistance there is likely to be

keep it frequent – performance management is a key part of any manager’s role: knowing what employees have to accomplish each week and whether or not they need help

make it employee-driven – the person who has most to gain (or lose) from performance management is the employee, so make understanding how they are performing and what they must do to achieve their bonus or promotion part of their self-development: they should be chasing their manager for feedback

focus on the future – concentrating on what needs to happen, rather than on what has happened, enables organisations to be adaptable, and helps identify employee skills that will best benefit the organisation.

Good performance management should include improving organisational, individual and team effectiveness as well as continuing development and managing behaviour to improve working relationships.