Why appraisals don’t work – and what to do about it

Appraisals are broken. Approximately 80 per cent of companies say they use annual reviews, yet the latest research* shows that they don’t enhance productivity at all. In some instances, they can be detrimental.

It is easy to understand why. Most appraisals involve spending hours writing notes about how objectives have (or have not) been delivered, retrospectively assessing an entire year.

This is despite the fact that given the pace of change in business today, it’s hard to see how objectives that were set 12 months ago can still be relevant for anyone.

And of course, people change a lot in a year. The roles, tasks and projects that excites someone will be wildly different from January to December. Any objectives designed to get the best out of staff, and their talents would need evolve and change similarly over that time. Sadly, this is not the case.

Instead, leaders, managers and staff sit in a room, staring at a piece of paper, scoring arbitrary metrics out of 5. This doesn’t give any real sense of real performance, progress or allow anyone involved to learn what was great and what can be done better next time. Is 4 out of 5 good? What does the 4 tell someone about how to get to a 5? And is a 5 right for them or the business… and why 5?

This confusion then breeds conflict. As individuals we tend to go into defence mode. We build a case for why the things we’ve done were right. We miss the opportunity to be honest and open with each other and learn and grow.

The whole process of appraisals doesn’t work for business either. A 2013 report by the Corporate Executive Board (CEB) pulled together more than 23,000 employee ratings from 40 companies and found no sign that ratings had any effect on profits or losses.

Feeding off of feedback

The good news is that there is a better way. It revolves around profound, individual ownership for growth and development.

It’s up to every individual in a business to reach out and seek the feedback on how they are doing, every day. There’s a simple model that helps our clients to take ownership of how they grow and develop as people.

It is critical that every member of a team knows exactly how they are doing. If someone does not know how they are performing, then it is impossible to own how they develop.

If team members wait for feedback, it will never happen. Everyone has to be pro-active and get out there and ask for it. This need not be on every single task (that could become a bit annoying!). But on the tasks where people are experimenting, trying something new, or there is a great opportunity to realise learning potential, then at the end of that meeting or interaction, it is vital that team members find someone relevant and demand feedback.

The point of this feedback is to identify what was good, great and awesome about the session or work. There will always be positives. This is the material that needs to be the priority in the course of the feedback.

Typically, businesses focus on the areas to improve. Yes this is important but there is huge value in seeking out the positives; it builds confidence and makes your team members feel stronger as a person and a unit.

Look for the builds

The critical point of the rest of the feedback is to identify that if the task was repeated, what suggestions could make it even better next time?

This is not a licence to focus on what was rubbish – because it will never have all been rubbish. The intention here is to learn how to make stuff better so that everyone is constantly evolving and improving.

This is a game changer for how people evaluate their own performance- but only if they can get into the specifics of the feedback.

To give you an example, I often get feedback from clients during breaks when I’m delivering a keynote or a workshop. Someone will come up to me and say, “I just had to tell you, I’m loving the session so far and I’m really enjoying myself”.

As lovely as this is to hear, the problem with it is I don’t know what I can do again based on that feedback to make my delivery better next time.

The key thing is to ask for the specifics. In my example, to ask: “What was it specifically that I’ve done that you’re loving and is making you have a good time?”

This is the data that makes the feedback not just useful, but something a business can work with. This radical ownership of personal growth and development is vital for new businesses. As employees learn and grow every day, they become clearer on what they are doing that’s having a positive impact on the people around them and the business. And they then do more of it. Which is far more useful than getting 4 out of 5 on a piece of paper…