News that two out of three companies are planning to change their staff appraisal processes “radically” might be good news – depending on what they come up with of course. And one in 20 companies are scrapping it entirely.
PwC conducted a survey which came up with these figures and said that that once-a-year assessment of performance and exchange of views between managers and staff didn’t motivate staff or provide the honest feedback bosses needed.
Most of the companies abandoning the traditional approach are encouraging managers to give continuous feedback so that problems are dealt with in a timely fashion and praise is linked to current work performance or behaviour.
PwC is cautioning managers not to abandon appraisal completely as they claim most employees like them as they helped them to understand what they were doing. Does it need an appraisal system for that to happen? I think not. Perhaps improved communication between managers and employees would do the trick.
But PwC also acknowledges that most managers don’t like doing them because of all the paperwork it entails.
Deloitte recently calculated it spent 2 million hours on 65,000 staff. They have replaced that system with one comprising just 4 questions.
Accenture has also dropped annual appraisals. In future staff will no longer receive a ranking or evaluation, just “timely feedback“.
They also say “Companies need to be careful not to throw out the baby with the bath water. Without the year-end rating the danger is that the distribution of pay and bonuses can become even more of a dark art as shadow systems evolve without proper governance and infrastructure behind them”. And what would HR find to do?
One of the reasons for discontinuing ranking methods is that globalisation has thrown up many different roles and comparisons become more difficult.
There are also cultural differences. I remember being asked in Sweden by a Swedish employee in a multi-national company why his boss always asked him where he planned to be in 5 years time. He said he was quite happy doing the job he had. I also coached a senior Swedish manager who decided to leave the company he worked for rather than having to turn down promotion to a more global role. He opted to move down the road across the Øresund bridge instead.
The Swedes tend to take a different view on careers, valuing work-life balance more than say Americans or Brits.
I’ve posted before on this topic