The yearly performance appraisal cycle should be only a starting point.
A sound performance management system is an invaluable asset to an organization. It cascades strategic priorities down through the ranks, spells out the what’s and how’s that define effective performance, promotes accountability, and enables leaders and employees to track and monitor how they are performing.
But, unfortunately, even when a performance management system is correctly focused, properly streamlined, and functioning as intended, most leaders and employees are not as engaged in the process as they could be. They don’t recognize its full value and, often, don’t like going through it.
Instead, they grudgingly participate by dutifully spending hours compiling and filling out their performance management documentation and sitting through a biannual performance discussion with their leader. In this discussion they find themselves justifying their ratings, defending their “mistakes,” and explaining away their missed targets and goals. In the end, they get their overall performance rating, their leader signs off, and they learn what their pay increase (if any) will be.
For their part, leaders often lack the timely and relevant data needed to evaluate a full year’s worth of performance accurately. The leader hopes to get through the discussion without the employee voicing concerns or objections when the leader disagrees with a rating or highlights the employee’s need for improvement or development.
It’s all such fun! And nobody ends up looking forward to doing it again next year.
How Did We Get Here?
It’s a shame that an important process, one that offers an opportunity to improve employee motivation and capability is all too often seen as a challenging, time-consuming, “check the box” biannual obligation. Yet, that’s the current view of the performance appraisal process in most organizations. So, how has it come to this? There are multiple reasons:
Infrequent discussions. Most performance appraisal discussions occur two to three times per year—a typical cycle includes a planning discussion at the beginning of the year, a mid-year progress update, and an end-of-year review. The problem with this discussion frequency, apart from the often-questionable accuracy and completeness of the data discussed, is that any learning moment has been lost or delayed beyond its point of usefulness. As a result, any “coaching” gets lost and the leader falls back on a discussion of the results rather than how they were achieved or not achieved—and what could have been done differently to ensure success.
Data bias. When there are only two or three performance discussions a year, it becomes difficult to prepare. This is because, with the exception of the beginning-of-the-year planning discussion, they are backward-looking and demand both leaders and employees to keep excellent records throughout the year or to reconstruct performance from up to 12 months ago. This requires significant effort on everyone’s part and invariably leads to performance appraisal discussions being based on limited or incomplete data. Even if the data is complete, performance data that is up to a year old is, well, old.
Much changes from week to week and month to month, and a discussion devoted in part to recounting what happened up to a year ago can border on irrelevant. Just as bad is when recent performance overshadows the evaluation of a year’s worth of performance, such as when a successful—or unsuccessful—project at year end is given too much weight when evaluating an individual’s performance for a 12-month period.
Polluting the performance discussion with compensation. Then there is the all-too-common practice of lumping together the performance appraisal and compensation discussions. This lethal combination can inhibit open and holistic discussion about performance, as the employee is likely to see the size of his pay increase as the only metric that matters when it comes to judging how well (or not well) he did during the year. Also, any opportunity for a meaningful development discussion is overshadowed by the discussion around compensation—the real purpose of the meeting, in the employee’s view.
The process overshadows the discussion. Because an annual performance appraisal requires so much preparation, it is easier for leaders and employees to fall into the trap of focusing on the process and forms rather than on the discussion. This is especially likely when a leader has numerous direct reports. Given the challenges with the data, it is often easier to see the performance appraisal process as an exercise in satisfying organizational expectations than as an opportunity to have a meaningful performance discussion—a fact reinforced by the frequent email reminders sent by HR to leaders and employees to complete these discussions by the designated deadline date.
Making Performance Appraisal Better
Despite all the issues described above, the annual performance appraisal cycle isn’t going away anytime soon—it’s too deeply entrenched in most organizations. To make the most of their organization’s performance appraisal process, however, leaders need to break free from the strictures of talking to their people about their job performance just two or three times a year and incorporate performance discussions into their day-to-day interactions. In other words, annual and biannual performance discussions need to be the culmination of, not a substitute for, frequent, timely feedback and performance coaching.
Does this mean leaders should have their direct reports’ performance plans handy at all times, so they can have a performance discussion at the drop of a hat? Do leaders need to have more frequent formal performance reviews with employees? Do employees need to keep better performance records? The answers are “no,” “no,” and “not at all.” But there are some quick tips and best practices that will make performance feedback and coaching more useful—and the formal performance appraisal discussions less painful:
Be timely. The most valuable feedback and coaching are provided in real time—immediately after, or even before, an event or task. For example, feedback and coaching on a poorly handled meeting is best provided immediately after the fact, when the experience is fresh in the minds of both the employee and the leader. This also allows the employee to begin taking steps to improve as soon as possible. Better yet is to have a coaching discussion with the employee before he leads the meeting to ensure a higher likelihood of success.
Be specific and feed it forward. Vague feedback and coaching open the door to misunderstanding and future disagreement. “There were some things in the meeting you could have done better” may be a good way to open a feedback and coaching discussion, but the conversation then needs to zero in on what specifically could have been improved upon—and to discuss specific actions the employee can take to improve.
Explain benefits or implications. Because the discussion needs to motivate the individual to take action, the leader needs to “sell” the importance of the feedback—i.e., the potential implications if the feedback isn’t acted upon and the potential benefits if it is. Group feedback sessions where an entire team reflects on a recent task or project can be an effective approach to promote ownership and buy-in. In these settings the leader can build on what is shared by the group, rather than being the first to speak and leading the discussion.
Be interactive. Balancing telling and asking offers multiple benefits. For one, it allows the leader to uncover information about the situation she may not be aware of: I had only been given the data to share with the group right before the meeting. It also provides an opportunity for the employee receiving the feedback and coaching to self-reflect and identify where he could improve. "How do you feel you could have handled that meeting more effectively?" makes it more probable that that the employee will accept the need to develop in that area.
Performance Discussions Should Never End!
To be more effective when discussing employee performance, leaders need to stop relying solely on the annual performance discussion and mid-year check-in. Instead, they need to initiate multiple and ongoing conversations with their people about their performance—and provide timely feedback and coaching that continues to move the employee forward in growth and development.
These ongoing conversations are immediately relevant and useful, and as such, they can feel supportive and personal. Plus, a benefit of these conversations is that, when the dreaded annual performance appraisal meeting comes around, there are no surprises and the conversation can focus on the future rather than rehashing the past.
Andrew Gill is vice president, consulting services, for DDI.