Performance review management needs an overhaul. Are check-ins the way forward?
Hailed as the most despised process by both employee and managers alike, the performance review process is the most disliked activity for line managers. This is due to validity of the process and questions on whether or not performance management and performance appraisals are effective; not to mention the potentially tense environment that could arise if views on performance differ between employee and manager.
A recent report by CIPD indicated that 4% of HR leaders feel performance reviews are effective and 42% said significant overhaul is needed to improve their current review process. The study of more than 9,000 managers and employees across 18 countries found businesses spend an average of 43 hours per year per staff member on formal conversations around goal-setting and performance evaluation, and on preparing for reviews. The cost and time involved with staff performance review ratings has led some organisations to abolish them altogether. However, the report found that by eliminating performance ratings productivity dropped significantly. It found that those who worked for organisations that had scrapped performance ratings scored the conversations they had with their managers 14% lower.
The business reasons behind performance management are simple; align the employee objectives and behaviours with business needs, and evaluate the achievement of those objectives and overall employee performance fairly. However, performance management is much more than simply setting objectives and monitoring the achievement of those objectives. There is a wider culture of employees and managers not liking the practice of monitoring and talking about performance, which can impact on the value of the process itself.
Performance management as a business process and concept is in the midst of a major change. Many companies such as Deloitte and Accenture have moved away from conducting an annual performance review or appraisals in favour of real-time feedback and check-ins. In their evolution as an organisation they realise that this is not the best practice to boost employee productivity and morale.
During 2018 we may see more organisations shifting towards real-time check-ins to enable managers to focus on having good conversations with their employees. Exploring their roles, career development and career agility with an emphasis on looking forwards, rather than backwards. Having those conversations will not only make the employee feel valued and support their potential to develop but also increase employee engagement. Furthermore, it allows the employee to take ownership of their development as they can request check-ins with their manager without having to wait for the annual performance reviews to discuss and review their career development.
Despite overwhelming frustration with performance review systems, they are here to stay. In 2018 HR professionals will have to take on new ways of designing these systems or using new systems to move beyond administrative processes to business impact. The most successful organisations will focus on strengthening the performance culture to embed performance management behaviours such as feedback and coaching into the day-to-day work rather than crafting it as a separate and administrative process.Check out MHR Talent Check-Ins