Say goodbye to performance appraisal

Michelle Obama, the first lady of the United States of America said that if her "future was determined just by my performance on a standardised test, I wouldn't be here. I guarantee you that." Employers think they should do performance reviews, but the truth is employees rarely enjoy this process. But can we eliminate annual reviews completely? Why do employers hate doing them and employees hate getting them? Do we need to change the overall process?

Let's look at some of the drawbacks of performance reviews.

THEY'RE TIME CONSUMING
If a manager has 8 to 10 employees who directly report to him/her, it can take as many as 12 hours to prepare the performance reviews. Many times managers rush through them, which leads to reviews with little substance in them. Another tedious aspects of performance review is the bureaucratic forms that need to get filled out and dutifully sent to HR.

NO FOLLOW UP
When the report is done, it is generally put away, only to be looked at a year later when it's time to prepare the next review.

BIASED APPRAISER
This is very common in our country. Presence of the halo effect in employee evaluation is the biggest weakness of the method. And in many cases, employees who do not deserve promotions may end up getting it. Furthermore, employee evaluation is often tainted by past performance even though they have improved over the year.

FEAR OF SPOILING RELATIONSHIPS
Many bosses do not wish to spoil their relationship with their subordinates, so they end up giving higher grades. This is an injustice to the really deserving employees.

DIFFERENT TECHNIQUES
It is very difficult to compare employees if different departments in the same organisation use different techniques of appraisal. And if this happens, it becomes very difficult to compare one employee with another.

While there may be thousands of shortcomings, the real question is: how can we change this scenario? If we make any changes, will the parties involved be open to them? Organisations may be nervous about eliminating performance review process because they need a fair and valid way to distribute compensation increases; they need a record of low employee performance when it lets someone go; and they need to capture performance data in an employee's profile for future promotion and other talent reviews.

But what is the alternative?

FEEDBACK-RICH CULTURE
Build a feedback-rich culture and a set of tools (online, formal and informal) that encourage every employee to give each other feedback. Let employees create their own goals on a regular basis. Compel managers to provide ongoing feedback and teach them how to have honest conversations.

SELF-ASSESSMENT
Assume that employees already know something about their own performance and encourage them to self-assess. People tend to have a good idea of their own strengths and weaknesses, they just need an open and positive opportunity to share it. This initiates dialogue about expectations and helps match their self-assessment with that of the organisation.

HIRE THE BEST
Managers should focus on hiring only the best so that they build a team that strives for the best and consists of top performers. This is never 100% possible of course, but rather than assuming that 25% of your employees will perform poorly, spend more time on culture and fit to make sure very few low performers make it into the organisation in the first place.

INVEST IN LEADERSHIP DEVELOPMENT
Managers at all levels struggle with selection, hiring, training, coaching, and evaluation. Give them the time and tools to learn, a framework for feedback, and a continuous development process to learn how to become better.

We need to remember that everyone wants to succeed.  If they aren't performing well it's not necessarily their fault. The organisation should take responsibility for helping them find a better fit if possible. Set and reset goals frequently. Forbes published an article on this mentioning that companies that set performance goals quarterly generate 31% greater returns from their performance process than those who do it annually, and those who do it monthly get even better results. This ensures employees get feedback on a continuous basis. 

There are several great alternatives to performance review so tweak your process and boost employee productivity to the max.

The writer is a working professional and a student of the DBA Program at the Institute of Business Administration, University of Dhaka