Due to many recent headlines, not least by Accenture, one of the world’s largest companies employing 330,000 people around the world, bosses could be forgiven for thinking that recent announcements announcing the abolishment of the annual performance appraisal mean that performance appraisals are now off the table. 

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Indeed, even Deloitte and Touche say that “traditional performance management —the annual process of rating employees’ performance and ranking them against their colleagues—is widely considered to be broken”. So, are employees now ‘off the hook’ when it comes to having their performance appraised and reviewed?

Commercial Director of Activ Appraisals, Adrian Lewis, explains why this is definitely not the case.

“In the past, performance appraisals have taken place once per year. The employee often dreaded this review and found the process stressful.” “Managers meanwhile had little time or planning for the appraisal and therefore whilst in truth the review should relate to a whole year, it related to the last few weeks and was purely based on the reviewer’s current opinion on the reviewee’s performance – and we wonder why it didn’t work well!”

“The abolishment of the annual performance review is anything but an end to appraising staff performance – it represents a commitment on the part of employers to communicate with their staff more effectively, and improve motivation on an ongoing basis!”

Lewis feels that a modern 360 degree approach, with effective recording of data from multiple sources, combined with ongoing communication is a far better way of getting the best from your people:

“More modern recording systems take feedback from multiple sources, not just the employee’s direct line manager. They store training records, feedback from co-workers, training requests and feedback from the employee themselves and feedback from other managers.

“This means that whenever the line manager has an opportunity to communicate with their employee, which should be frequent, they have the full picture – they don’t need to wait a year, they can give advice and guidance as and when needed – and it’s a two way ongoing process with the employee being part of the process rather than a very formal annual review that feels like a visit to the Headmaster’s office.”

The reason that the traditional appraisal ‘does not work’ is that there is a marked difference in the way individuals work – and both high and low achievers are equally valuable to the organisation.

Pitting people against each other demoralises both the low and high achievers, whereas focusing instead on an individual allows for flexibility and individual coaching – which is far more effective.

One company who have successfully changed their approach to performance appraisals is Adobe. The process has been entirely replaced by ongoing feedback and either an employee or a manager may request a “check-in” meeting every three months.

Before the actual meeting occurs, a group of employees from different levels provides feedback on the employee’s performance. The results enable the manager to tailor their advice on how they can improve performance and deliver feedback – the approach is collaborative and continuous and engages both sides. Group performance is also evaluated, leading to a more rational determination of group compensation.

The results speak for themselves: Since the demise of the annual appraisal, and its being replaced by an ongoing approach, Adobe have experienced a 30 percent reduction in voluntary turnover – which is rare in a highly competitive talent environment.

Adrian has the final word:

“This modern approach is so much better – rewards and recognition can be immediate and constructive guidance can be given when needed, not 6 or 12 months later. In summary, the annual appraisal has become an ongoing appraisal and it’s fantastic for line managers and employees alike. Our software makes it extremely easy to manage the ongoing process and helps you get the best from your people.”