Once or twice per year, organisations usually conduct performance review meetings (appraisals) with their employees. They use a template or a tool and define a specific framework to standardise the process around pillars such as:
Appraisal period
Rating scale
Goal setting
Competency assessment
Feedback rules
Managers are trained in how to give—and receive—feedback. Generally, the performance rating spectrum reflects a bell curve that has its peak point between “Expectations met” and “Expectations exceeded”.
The performance management policy usually highlights that the main purpose of the appraisal meeting is to help employees perform better and further develop their skills.
All this sounds very good, right?
So why is it that the performance review process is the most disliked of all HR processes? Both managers and employees perceive it as a painful exercise.
Additionally, scientific research confirms that performance management is not necessarily improving performance. Please see “8 Reasons Why the Performance Review Is Universally Hated” by Tamra Chandler (2016), or W. Edwards Deming’s Out of the Crisis.
As a consequence, a few larger companies have abolished their appraisal process, while some have abolished their rating scale in recent years.
But if abolishing the appraisal process is not an option—due to labour law considerations, regulatory requirements, or because appraisal results drive variable remuneration—what can we do to make the process more acceptable and valuable?
Here are seven suggestions:
Make it a dialogue from A to Z.
Establish real goal agreements instead of top-down goal setting. Development goals are as important as performance goals.Reflect corporate values in the appraisal form.
Create a strong link between expected behaviours and the employee’s actual behaviour. This is the culture–person fit.Focus on the employee’s development and experience instead of past errors.
Errors should be dealt with immediately and should not become the main focus of the performance review.Introduce a one-up review.
Make sure that appraisals are reviewed by the manager’s manager or someone else who has observed the employee’s behaviour. This makes the process less subjective.Maintain a continuous conversation.
Instead of meeting only once per year, keep communication channels open all year round, with weekly or monthly check-ins on the employee’s performance and behaviour.Use better technology.
Upgrade your performance management tool with features such as real-time data, a 360-degree perspective, continuous accessibility, and integrated goals and development plans. Make sure the app is user-friendly and appealing.Focus on the employee experience.
By understanding how employees’ needs are evolving—in terms of well-being, career aspirations and work–life balance—we can better understand their perception of their employment experience. Taking this seriously and making it real is key to better retention and better job suitability.The reverse mentoring concept should be embedded in the performance management process, making it a genuine two-way conversation. This is especially important for Millennials and younger generations. See also Deloitte’s Gen Z and Millennial Survey 2023, pages 33–34.
All seven points, however, will fail to deliver a better process if managers do not approach it in the right manner.
A very effective way of establishing a better feedback culture is Kim Scott’s Radical Candor model, which combines two components:
Caring personally
Challenging directly
Together, these strengthen relationships and inspire people to be their best.