Why the annual appraisal is dead

Outdated performance management tactics could be harming your business
Nick Gallimore
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Performance management presents a huge problem, and it’s one that’s nowhere near close to being resolved for the vast majority of businesses. 

Too many organisations are reliant on outdated approaches that amount to little more than pen pushing and time wasting. Annual appraisals, 360 degree feedback, quarterly reviews and written feedback are holding back the career development of employees and actively harming your business’ productivity. 

Performance management matters. It’s a vital part of professional development, yet all too often it sinks to the bottom of the pile and that actual output is merely lip service to the incredible potential that can be unlocked when performance management is done properly. 

Performance and productivity are most businesses’ number one objectives, so understanding how we get people to interact more naturally in performance conversations is vital. 

When performance management goes wrong

Practically everybody I speak to in my line of work has a terrible performance management story. Irrelevant feedback, woolly remarks, delayed criticism, inappropriate comments - they all add up to create a wholly ineffective performance management experience that does the opposite of what it says on the tin. Moreover, for so many people I speak to, these negative experiences leave them with a lasting poor impression of the employer in question. 

They don’t work for employees, but do they work for employers? You might have guessed it - the answer’s no.

Like most performative, tick box exercises, appraisals tend to be checked off the list then consigned to a folder, never to be seen again. 

So why, then, do so many businesses insist on keeping these inadequate processes in place? 

I believe that the answer lies in a lack of understanding about what good looks like. 

How to do performance management well

Good performance management is easy to get right - but it does require a total shift in approach. Doing performance management well involves three key elements (and you’ll notice that annual tick-box appraisals are nowhere to be seen!):

  1. Set realistic, measurable goals.
  2. Give real-time continuous feedback.
  3. Provide coaching and training to support development. 

These three prongs might initially sound pretty nebulous, but the science of performance management is actually very well known and it’s consistent across multiple formats. 

If we take that three-pronged approach and apply it outside of work, it becomes a bit clearer. Take sports. Most people have a general understanding of how to get better at a sport; whatever the sport - whether it’s running, tennis, swimming, football - the approach to improvement is generally the same. 

The path to getting better starts with a goal: Set realistic, measurable goals. “I’m going to run a marathon,” or “I want to win a tournament,” for example. 

Then you need to practise: Give real-time, continuous feedback. Practise regularly and you give yourself feedback with every training session. 

Then we look at coaching, which is a concept so intrinsic to sports performance it has its own profession. To drive improvement, coaching is generally accepted as appropriate and important: Provide coaching and training to support development.

People are happy to engage with these concepts outside of work but for whatever reason, they rarely translate into the workplace effectively. 

Good performance management involves clear goals, continuous feedback and coaching to support professional development. 

Why it matters

Performance is one of the key things that contributes to results - on both a personal and company-wide level. Good performance supports organisational goals, making it an essential part of a business’ development plans. 

Businesses should be thinking about how they become more productive. How do they do more with what they have? How do they get the most out of people, their most precious resource? 

Performance management can be the magic bullet that solves that problem.