Our survey reveals that fear of change and lack of adequate technology is holding managers back
As CEO of Clear Review, I’ve written a number of blogs and articles about the benefits of regular performance discussions, but I am conscious that, despite how passionately we feel about continuous performance management, not everyone is adopting it as a practice…yet.
For years now, various sources have proclaimed the demise of the annual appraisal, suggesting that it will be extinct (and I firmly believe that it will be). But how long will that take? To find out, we conducted a webinar (which can be viewed for free here) during which we asked 200 HR and management professionals about their existing performance management systems. The respondents included HR executives, senior managers, CEOs and business directors and were from companies from a range of industries, including Oxford University Press, Vodafone, Next, Visa, HMRC and Odeon Cinemas Group.
Our survey confirmed what we suspected, that, although companies are interested in moving to continuous performance management and see the benefits, not many have actually adopted this forward-thinking approach yet. In fact, we found:
- 65% of our respondents came from companies who still used annual appraisals
- 24% were in the process of moving away from annual appraisals
- Only 11% of our respondents were already using a continuous model of performance management
So why were so many companies holding back from changing their performance management systems? As part of the webinar, we asked what their major concerns were when it comes to embracing a more agile approach to performance management.
60% of participants are worried about encouraging managers to have more meaningful conversations
Of our recipients, an incredible 60% of respondents were worried about how they would get their managers to have regular, meaningful performance conversations. This is a valid concern. After all, it isn’t simply the frequency of performance conversations that matters — it’s the quality. You want managers and employees to develop trusting, authentic relationships and discuss matters that are critical to great performance including progress towards goals, strengths, areas for development as well as frustrations and concerns.
In our experience of supporting many organisations with their transition to a continuous performance management cycle, this concern can be overcome giving managers the appropriate training and guidance so they understand the benefits of regular performance discussions and they know how to conduct them effectively. Here is a blog that covers essential talking points to cover during one-on-ones, as well as a one-to-one meeting template.
Nearly a fifth of participants are worried about visibility with regards to regular performance conversations
18% of our respondents were worried about how they would get visibility of whether check-in meetings are taking place and how often. Again, this is a genuine area of concern and it can only really be addressed by using appropriate performance management software to schedule and track these check-in meetings. Without this structure in place, employees can be forgotten and fall through the cracks. This is a clear road to employee disengagement and low productivity, given how important managerial communication is to workers.
Performance-related pay is another concern amongst annual appraisal devotees
Despite companies knowing that annual appraisals are not working in their organisation, some of them are struggling to say goodbye to them because yearly performance reviews are a large part of how they determine employee bonuses and raises. 12% of our respondents thought they would have trouble transitioning to agile performance management because they were uncertain of how they would handle performance-related pay. However, there are proven, workable answers to this conundrum and I explain them in detail in my free performance management and pay eBook which details how to manage performance-related pay with continuous performance management.
Rest assured that not only can you manage performance-related pay issues with this new approach to performance management, but your decisions will ultimately be fairer and more objective.
Some companies are at a loss as to how to get senior buy-in to move away from annual appraisals
In 9% of our surveyed companies, HR were finding that some of their leaders were resistant to change when it comes to dropping appraisals. This is understandable as these leaders are less likely to have read the evidence that underpins the rapid shift towards continuous performance management. Plus appraisals have been around for so long, there can be comfort in what you know, even if it’s ineffective.
To overcome this, it’s important to present leaders with clear evidence of how employees and managers feel about annual appraisals in your own organisation, combined with independent research on the effectiveness of alternative performance management methods. Here is a handy 5-minute video aimed at senior managers which explains the benefits of continuous performance management.
Lack of appropriate performance management software is hindering the transition to continuous performance management
Lack of technology is proving to be a big barrier to the adoption of continuous performance management. Of our 200 respondents, 53% stated that “We have the technology but we haven’t found the right solution”. A further 29% claimed, “we have the technology but it’s not doing the job”. This amounts to an incredible 82% of respondents who are having issues with the software.
This is no surprise since most are using technology that was designed to facilitate annual performance reviews rather than regular check-ins and real-time feedback. To be effective, software needs to be purpose-built for the task at hand. When software is made to do something it wasn’t originally designed to do, it ends up feeling ‘clunky’ which will ultimately turn off users and hinder regular performance discussions.
Fortunately, continuous performance management software such as our own Clear Review does exist. This kind of software is light touch, intuitive and actively encourages meaningful dialogue and feedback, rather than acting as a barrier.