Performance management in the 21st Century

Julie Lock looks at why we need to ditch appraisals and offers advice on how to successfully manage performance.

An engaged workforce impacts positively on an organisation’s revenue and growth, yet we continue to put our workforce and line managers through a costly and disengaging practice which yields no benefit. High quality employee performance is required every day – it is not an annual event, so why treat it so?

Spot the difference

Let’s take a look at the current needs of the annual appraisal process and then compare against the needs of performance management without the ‘annual’ element:

The CEO needs to:

  • Confirm they have the right talent in the right roles with support and development in place to meet organisational goals
  • Ensure potentials are identified, engaged, career paths are in place, development plans are actioned and flight risk is eliminated
  • Ensure key roles have succession plans in place to limit the damage caused if people leave
  • Gain assurance that employees are engaged, that they understand the values of the organisation and their contribution
  • Verify employees are happy, have the right level of investment and know they are valued
  • Validate employees are demonstrating the organisation’s values
  • Have confidence in the organisation’s branding, ensuring a healthy talent pipeline
  • Be assured under performance is dealt with swiftly with minimal impact to operations

HR need to:

  • Ensure managers and employees are trained on the annual appraisal process and documentation completed
  • Ensure managers conduct employee reviews to meet deadlines
  • Calibrate ratings given by managers so they fit into the bell curve
  • Process employee appeals
  • Provide data to the leadership team

Line managers need to:

  • Prepare assessments for each employee looking back over the past 12 months
  • Fit appraisals into their work schedule while delivering business as usual
  • Figure out what feedback to give each employee based on performance
  • Deliver hard messages to unsuspecting employees
  • Document a year’s worth of review per employee and apply an overall rating

The employee needs to:

  • Gather evidence of their contribution and successes over the last 12 months (not drawing attention to hurdles or issues they have experienced, most start to feel anxious about those incidents being raised so plan their defence in advance)
  • Plan how to discuss their career development which they have probably been thinking about
  • Approach grievances such as management, behaviours, environments, pay and benefits. Employees  often avoid confrontation by looking for another job

The CEO needs assurance that the management of performance and development delivers the talent requirements for the organisation’s continued success. HR’s needs are actually administration processes to manage this complex and time-consuming annual event. This is not what HR professionals signed up for.

Managers must cope with the pressure of fitting these reviews into their workload and complete necessary documentation.


Employees’ needs are never fully met because it is impossible to review 12 months of performance and development once a year. Objectives change and those set in the previous year don’t always apply to current work, resulting in disengagement, resentment and feelings of being undervalued.

So let’s look again at the needs of performance management but this time not as an annual event:

CEO needs:

  • No change.

HR needs to:

  • Provide quality training, equipping managers to become proficient coaches, mentors and developers of peoples’ skills
  • Build and maintain a brand that continually attracts top talent
  • Embed the mission and values into the organisation’s culture
  • Develop fresh engagement practices
  • Assist managers with development programmes for rising stars
  • Eliminate poor manager behaviours
  • Protect and retain talent, safeguarding the business against flight risk
  • Assist leaders with successful succession planning
  • Support coaches and mentors with personal development plans
  • Provide the leadership team with an accurate, real-time workforce talent profile when required
  • Predict potential talent risks and create a solid contingency plan. This IS what HR professionals signed up for.

Managers need to:

  • Check-in with employees regularly
  • Address under performance by agreeing a plan to success, offering support and mentoring to improve this
  • Coach people through new challenges, projects or roles
  • Mentor people to become the best they can
  • Give advice when required
  • Discuss and promote career progression, even considering moving top talent to another area of the organisation
  • Be approachable so employees can raise concerns
  • Give praise when due
  • Document discussions when they take place.

The employee needs to:

  • Know they are doing a good job and are valued
  • Have access to continuous coaching and mentoring enabling them to excel
  • Be able to raise concerns and ask for help at any point
  • Have a clear development and/or career plan
  • Understand the organisation goals and values and how they contribute

Managing performance is fundamental to the success of every organisation. Annual appraisals won’t deliver this, a year is a long time in today’s agile society.

In 1967 what did a year at work look like for most? Stable, routine, same workload day after day. Back then an annual review of an employee’s performance worked because very little changed in a year. An annual rating meant something.

Time was easier to manage too, everyone worked rigid shift patterns and most at the same location every day. Organisations had more managers and managers had assistants so resource was available to prepare for annual appraisals.

Fast forward 50 years and the world of work is very different. Technology exists to manage repeat processes. Jobs are diverse. Employees work on projects, in virtual teams, remotely and objectives change continuously. No two days are the same. If we are to assess performance it ought to be on these bite-sized projects at a relevant point in time.

Today’s workforce demand more from their job than just a salary, they need drive, excitement, passion, pride, careers and continuous feedback.

Now is the time to stop forcing performance management into an annual event because it no longer belongs there. It’s time to move to real-time performance management.


About the author

Julie Lock is Service Development Director at MHR


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