A performance appraisal (or review) is for individual employees and their managers to engage in a dialogue about their performance and development, and the support they need in their role, both to assess recent performance and focus on future objectives, opportunities and resources needed.

the end of appraisals?

There is some indication, perhaps reflecting pressures on line managers, that the annual appraisal is falling out of favour. Microsoft announced in 2013 that it was abandoning individual performance ratings that pit employees against each other, partly because the organisation considered this type of ranking “destroys teamwork”. Around the same time Adobe announced it was dropping performance reviews altogether after noticing an upturn in the number of people leaving after the annual appraisal process.

But while abandoning the annual appraisal might be popular with some and save organisational time – Adobe estimated that abandoning performance reviews will save some 80,000 employee hours a year – there remains a need to ensure employee contribution to high levels of organisational performance is improved, and annual appraisals are still used by most Australian organisations.

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

There has been a shift in focus away from measuring individual output to a greater emphasis on individual contribution to organisational objectives through behaviour and capability. This reflects that performance management is now as much about driving engagement, and that collecting information and data is less about individual outputs than providing better insight into the drivers of performance.

However it is carried out, 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 will 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.

more articles about: performance management and appraisals