5 reasons performance appraisals fail and how to fix them

Mention the words ‘It’s appraisal time’ to a work colleague and you’ll probably get an eye roll - so why do performance appraisals fail and how can you fix what is going wrong?

A decade ago, performance management systems were all the rage. Customers were falling over themselves to buy systems like SuccessFactors, Taleo and Cornerstone on Demand. But the annual performance review has now fallen out of favor with more stories of failure than of success.

Mention the words ‘It’s appraisal time’ to a work colleague and you’ll probably get an eye roll.

Yet, today, talent acquisition and retention are still pressing matters for HR Leaders and the need to identify and coach your top talent is just as important as it’s ever been.

What went wrong and how can you fix it?

Reasons for failure of performance appraisal

• Once-a-year reviews
• Appraisal forms are too long
• Final numeric ratings ("I'm a 3 but my colleague’s been given a 2!")
• Your managers aren't trained
• Objectives are more like job statements
  
  

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Problem 1: The once-a-year review

Conducted in isolation, the annual appraisal is ineffective at best and demotivating at worst. A year is a long time. Can you remember what you posted on Facebook or Instagram this time last year? Even the very best managers would struggle to remember work completed 11 months ago.

The annual appraisal often reverts to a discussion of the last 3 months with a bit of lip service reviewing the work that happened earlier in the performance cycle. Employees get frustrated at past achievements getting forgotten or overlooked; managers hate the workload involved in having to remember 12 months of effort for each team member.

Fix: Continuous feedback and mid-year checkpoints

Introduce tools where colleagues can give feedback on other colleagues and managers can praise good work. Crucially, this feedback must feed into the main reviews so both manager and employee have a clear reminder of all that’s happened since the last meeting.

Similarly, holding a mid-year or quarterly review breaks up the pressure of the final year review. If you supplement this with mandating your managers to have 15 minute monthly check-in sessions with your workers, you’ve got the basis of continuous performance evaluation.

Sounds like a lot of work? That’s a problem…

Problem 2: Appraisal forms are too long

When HR is tasked with coming up with a performance management process, the instinct is to come up with some ‘mega-form’ full of wonderful questions to cover every aspect of performance. To look even more impressive, how about filling the form up with glossy diagrams of performance cycles, competence libraries and objective weighting. Such a mighty form shows how capable the HR Talent Team is!

Forms like this are bewildering to the average employee and an annoying time sink for managers that have to complete them for each team member. A long form is a barrier to multiple review periods per year – who wants to fill those out every three months?

A good review should, at its heart, be an honest and constructive conversation between two people. Your appraisal form should capture the key points for prosperity but it’s not a replacement for that manager / employee relationship.

Fix: Less is more

Strip that form back. You really don’t need that many questions to gauge if things are going well for that employee or if the manager wants them to improve. At Applaud, we have four simple conversation starters and optional room for 2-way feedback. You can download our template below.

That’s it. Simple. Then invest in an easy to use performance management system to avoid the completion and filing of multiple word documents. 

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Problem 3: "I’m a 3 but my colleague’s been given a 2!"

The dreaded final rating. Was there ever such a divisive policy introduced by HR? Giving a number is bad; introducing normalization so each manager can only give out so many 1s, 2s or 3s is worse. The final rating has single-handedly destroyed many perfectly good performance processes by demoralizing the recipients.

Your great performers don’t need to be told they get your top rating. They know it.

Your under performers will get demoralized at getting a low rating to the point of performing worse.

Your average-good performers, which is probably most of your workforce (excellence and ineffectiveness should be margin cases) are either going to be ambivalent or annoyed that they haven’t got the next rating up.

Fix: Scrap it

A good performance review should be around coaching, feedback and improvement not placing someone into a numbered box. Put a ‘5 - Low’ on a performance review sheet and that’s all the worker sees and thinks about, not the wonderful constructive feedback their manager gave them.

Scrap the final rating. If you need to report on your top talent for retention planning and candidates for offboarding, then introduce a hidden ‘Top Talent’ flag and a ‘Underperformer’ flag and use those for your management reporting.

Problem 4: Your managers aren’t trained

You can have the best systems in the world and the best processes but if your managers don’t have a clue about how to hold a performance review, you’re doomed. Don’t assume that your managers know how to run one or are even comfortable doing so. So many companies promote good individual contributors into a management role and then believe they’re capable of running multiple feedback sessions in a short space of time.

Fix: Support, train and coach your managers

Performance reviews shouldn’t be complicated. They are a conversation not an interrogation. Create a ‘cheat sheet’ for managers to follow, even to the point of how to open up a review. Go further with ways to tackle poor performers (a real challenge even for the best of managers) as well as how to extract even more out of your best performers (giving constructive advice and growth plans to someone who really is Top Talent is surprisingly difficult).

You might not have the budget for expensive training and development schemes, but your HR team should be able to put together some guidelines appropriate for your business. If you want an example, feel free to download the one we use at Applaud below.

And give your managers support. Your managers – of all levels - *will* have problem employees they don’t know how to deal with. Encourage a supportive environment where senior managers can help out the junior ones and human resources get hands on where needed.

Problem 5: "Your goal is to write one blog per month"

Setting goals and objectives is a terrific way to clearly outline what a worker has to do to grow and improve. Sadly, they are terrifically difficult to write as well. Yes, we know they should be SMART. What they shouldn’t be is a simple job statement.

Creating a set of objectives that simply masquerade as a job description aren’t helpful. What happens is the capable worker completes the objectives they’re paid to do, gets a mid-level rating at the end of the year and queries why they didn’t get top marks because “they completed all their objectives”. “Ah”, says the manager, “but I was looking for more”.

Fix: Think about promotions

When writing objectives, my rule of thumb was to consider if completing them indicated the employee was ready for promotion, or working above their grade. Sometimes that’s difficult, especially for someone that’s just been promoted. Taking that thought process, though, gets you scrapping lazy goals like ‘take more training’ or ‘complete project X by 31st July’. Those aren’t growth objectives, that’s a task list.

Worse, things like “Get to work on time” or “Take less sick days” are basic things you should expect from any employee.

Good objectives should be moving people out of their comfort zones, doing things they aren’t currently doing. Try things like ‘present your project to the team’ or ‘contribute an article to our marketing team for publication’ or ‘mentor this new starter’. These are better examples of goals that will stretch your workers and make them more valuable to your business.

So, in summary, when it comes to reviews, reduce the complexity, increase the frequency, introduce tools for regular feedback and simplify the experience overall. Reviews may never be ‘easy’ but there are ways to make them less painful. Good luck!

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