In recent years, the whole purpose and value of annual performance reviews has been the subject of much debate among leaders, HR departments, occupational psychologists and academics.
It seems, then, a good time to examine the case for and against such an approach, looking at some ways of developing and evaluating performance – particularly the performance of those in a management role – in the 21st century.
What are performance reviews?
The whole field grew out of what we used to term ‘appraisals’. These were commonly operated in larger organisations for many years through the 1980s, 90s and into the new millennium. Often, they were targeted only at those in certain roles, leaving many staff excluded and perhaps feeling undervalued.
The basic idea of such a system is to hold a formal review of performance over a period of time. Considerations usually include progress against objectives, key achievements, development of skills, and even behaviour. In many large or public sector organisations, the achievement of a ‘good review’ is necessary to be considered for a salary increase or promotion.
Typically, the design and coordination of such reviews is the province of HR departments. However, in the period following the ‘economic meltdown’ after 2008, such a process has been under increasing resource-pressure and scrutiny to identify its relevance and value to the contemporary workplace.
So, let’s take a look at the case for and against performance reviews.
The case for
In many organisations, the formal annual review might be one of the few times when a staff member has exclusive access to their line manager.
It can be an opportunity to gain a greater insight into their own performance and their manager’s expectations, receiving constructive feedback on how they are doing and advice on how to improve.
It is also often the only time some people get to discuss their future aspirations and development opportunities. In an hour or so, such a review might energise, motivate and inspire an individual to achieve or sustain high performance.
It might also be a very effective way of addressing a performance shortfall and to agree short and long-term actions to raise performance standards. If handled well by an engaging and supportive leader, it can be hugely beneficial to morale, motivation and achievement.
The case against
Many organisations create complex systems involving detailed preparation forms, and seem more interested in the administration and timely completion of the process than they are in the value or quality of the reviews themselves.
Untrained and unengaged leaders can treat the whole process as a box-ticking exercise or a chore to be completed as quickly as possible. This can leave staff frustrated and feeling under-appreciated, leading to disengagement and potentially the departure of talented individuals.
In some instances, leaders and managers might demonstrate their attitude to the review (and perhaps to their staff) by forgetting about it, postponing it at short notice or treating it as an opportunity to deliver bad news without consideration about the effect on staff morale and motivation.
On balance, the best conclusion might be to say that performance reviews can be an effective and powerful tool, as long as:
- Leaders and managers are trained to deliver reviews effectively
- The focus is on the review session itself, on the staff member and on the development actions that follow, not the ‘admin’ that surrounds the system
- The system is streamlined to ensure every minute spent adds significant value
- The purpose is to inspire, engage and motivate staff to achieve higher levels of performance