Performance appraisals may be losing favour in some organisations over different approaches to performance management, but Adrian Lewis, Director of Activ People HR says they are still a crucial part of nurturing and engaging staff.
The 2019 Gartner Performance Management Benchmarking Survey[i] showed 81% of HR leaders are making changes to performance management, and some companies have even considered eliminating altogether the numeric or qualitative labels they use to grade employees or rank them against each other.
Gartner also highlights in previous research[ii] that performance drops when employee performance ratings are removed, suggesting managers struggle to give adequate feedback or set expectations.
Other research this year by Appraisd [iii] suggested regular ‘catch ups’ between employees and their line manager were a welcome approach, particularly with Generation Z workers (people born between 1995 and 2010) and female employees.
Adrian Lewis says, “It’s essential to talk to your people to focus their energy and motivation. Whilst companies have a variety of ways to do this, including regular ‘catch-ups’ and ranking their employees, there is still a place for annual appraisals to make employees feel valued and recognised.
“Often businesses think that annual appraisals are a time consuming paper exercise or an old fashioned method for monitoring performance, but with the right systems in place to manage the process effectively they can offer a chance to nurture talent and engage employees.
“Unfortunately our experience is that many businesses, particularly SMEs have no formal structure for appraisals. Those that do often use old, outdated models that are not fit for purpose with annual reviews linked to pay and the opinion of just one manager. This can make the process stressful and unhelpful for both employees and line managers.”
To address this, Activ People HR developed Activ Appraisals, part of its modular cloud based HR software suite to help managers prepare before an appraisal or review, and to record all feedback so they always have a full picture of their employees’ achievements or challenges.
This online software solution is quick and easy to use, as well as being flexible to enable organisations to record and manage appraisals in the way that best suits them.
One business that has been using Activ Appraisals is Lindsay & Gilmour an independent community pharmacy group with 300 members of staff, operating across 32 locations in Scotland. When managing director, Phil Galt joined the company in 2014 one of his priorities was introducing digital processes, including a system for appraisals.
Before Phil joined the company there wasn’t an appraisal process in place and he was keen to implement a performance development framework called the ‘Five Conversations’. Unlike traditional annual performance reviews, this is a continual cycle for appraising staff.
Line managers meet with a direct report once a month for a short conversation looking at five separate areas of staff development including their job satisfaction, what their particular strengths and talents are, any opportunities for growth and area of learning and development and finally their suggestions for business improvement.
Phil explains, “The appraisal solution makes it much easier for the managers to keep track of everything as it can be logistically challenging having lots of different conversations ongoing. It also means there are no pieces of paper flying around and everything discussed remains confidential as it is secure in the system. As a business we can also use the data at a high level to identify trends in employee development requirements.”
Adrian Lewis adds, “The hectic pace of business these days can make nurturing employees challenging. This tool not only ensures employees get regular feedback, but that achievements are recognised and areas of concern addressed, all of which can improve employee engagement and productivity. Companies wanting to stay ahead of the competition in 2020 should be embracing performance reviews to ensure they attract and retain the best talent.”
For more information on Activ Appraisals