By Amira Kohler, Innovation Director, Clear Review
For many, the term ‘performance management’ is synonymous with the dreaded annual performance appraisal. Many cringe at the term. As quoted in a 2019 BBC article, “annual assessments can be “wildly inaccurate”, even “soul-crushing.”
That’s not surprising; annual performance reviews (sometimes called appraisals) have a number of major flaws. And yet, they still survive — a 2018 survey by the research firm World at Work found that 80% of companies still used formal performance reviews. So how have they survived? They remain in place because most organisations still need the outcomes of the performance review process, although they’d prefer to get these outcomes by a better method. Step forward the ‘Performance Snapshot’ – a modern solution to an old problem that has worked for hundreds of organisations using Clear Review technology combined with a continuous performance management process.
What’s really wrong with performance reviews?
Traditional performance reviews had four major flaws: Firstly, they were bureaucratic and time-consuming and therefore deeply unpopular with managers and employees alike. Secondly, employees disliked the tick-box exercise of receiving a performance rating, which crystallised a year’s worth of work into a single label or number. Thirdly, there was an issue with recency bias whereby an employee’s recent achievements (or failures) skewed the judgement of their manager. This lured savvy employees to ‘gamify’ the process which further distorted the results and led to ineffective and unfair outcomes. Fourth, evidence has shown performance ratings have no relation to organizational performance. (This was evidenced in a 2012 Neuroleadership.com report which gathered more than 23,000 employee ratings from 40 companies and found no sign that ratings had any effect on profits or losses, reaching the damning conclusion that “performance ratings have no relation to organizational performance whatsoever”.)
So why have performance reviews continued to survive?
Given these significant flaws, why then have performance reviews continued to survive in 80% of companies? Performance reviews are hard for organisations to dump because they fulfil two key purposes: firstly, they provide the forum for a dedicated discussion about an individual’s performance and development. And secondly, they enable employee performance to be measured and assessed. So, the logic goes, they may be flawed, but they are better than nothing!
Introducing Performance Snapshots – a different, much better, way to achieve both these outcomes
At Clear Review, we have seen that organisations can solve this conundrum by combining a continuous performance management approach alongside our Performance Snapshot functionality. Adopting a continuous approach means that managers and employees have check-in discussions frequently throughout the year, providing a regular forum for a dedicated discussion about an individual’s performance and development (thus achieving the first outcome). Then at the end of the year they can use the data gathered from these discussions to complete a targeted Performance Snapshot. This poses a small number of highly targeted questions to identify key employee metrics around performance, top talent, promotion readiness or succession planning. Our Performance Snapshot functionality enables employee performance to be measured and assessed based on rich information which the technology serves up at the key moment (achieving the second outcome).
A simpler, more engaging process which drives high performance and engagement whilst delivering credible, measurable metrics based on empirical evidence built up over time through regular check-ins.
We here at Clear Review are passionate about delivering great performance management that works for managers, staff and HR to support a smooth and productive way of monitoring employees progress, helping organisations and staff to achieve goals together. Over the next few months, we will be sharing more content in the form of blogs, videos and webinars, around how to get the most of performance management and exploring the theme “Annual Performance Reviews are dead, long live the Performance Snapshot”.