It’s coming up to that time of year again, and your manager sends a calendar invite to meet for your annual appraisal. Not something you’ve been looking forward to, as it’s highly likely that your agenda’s differ. They want you to become more productive and are likely to have all sorts of new responsibilities, procedures and measurement metrics to hoist on you, and you want to know how much they appreciate you, and how they’re going to express that in financial terms.
You may or may not have had regular meetings with your manager in the preceding year, but very often, scheduled one-to-one meetings are the first to get canned when work pressure builds.
Nearly 10% of Fortune 500 companies have done away with annual ratings. (Washington Post)
Many larger companies are now beginning to challenge the whole process, and move to a model of ‘continuous listening’ in order to assess areas like morale, productivity and management issues.
What are the Pros of moving away from the Annual Appraisal towards ‘Active listening’?
- You can move at the pace of your workforce. Forrester Research analysts Paul D. Hamerman and Claire Schooley say “once-a-year or every six-months feedback is not frequent enough to meet the ever-changing pace of business.”
- Increased employee engagement – Currently 74% of employees are not engaged at work. This costs $350 billion per year. The 26% that are engaged promote company culture, are decision makers, focused on their careers and are motivated by their leaders. An engaged employee is both happy and satisfied with the emotional commitment to the organisation and it’s goals.
- Feedback becomes more meaningful. What if your Fitbit calculated your steps but then only gave you your step count at the end of each year? The data would be meaningless and not really helpful as you try to take more steps daily. Annual feedback can feel the same way to employees. **
- Higher employee recognition – When asked ‘Why did you leave?’ the reason 60% gave was that they did not feel their work was recognised. ***
- Lower attrition – Employees report that they feel more valued and therefore less likely to leave.
- Lower cost/time used up in preparation and the actual appraisal itself.
And the cons:
- A hindrance if nothing else is put in place: If you decide to do away with annual appraisals with no other system in place you could hinder the company even more. Employees need regular feedback. Companies need more meaningful and regular insights. Moving away from annual appraisals without another methodology for feedback in place could be detrimental all round.
In summary:
Annual reviews are:
- Costly
- Inaccurate
- Discouraging
- Time consuming for both the employee and employer
Continuous listening:
- Offers real-time insights and feedback
- Encourages the ability to set better goals
- Enables a culture of recognition
- Higher engagement with Millennials
I don’t believe there is a ‘one size fits all’ solution that all companies should adopt. Changing any ingrained process around people management is always a long journey, and any solution needs to take into account factors including;
- Organisation Culture
- Management Structure
- Workforce location
But the fact remains that more regular employee communication across the whole spectrum of engagement with the business is more likely to yield benefits to all parties.
** Kris Duggan, CEO of BetterWorks, the enterprise goals platform
*** https://www.tapmyback.com/employee-engagement/25.htm
