The debate: has the appraisal had its day?

20 April 2016

Author: Grace Lewis


The debate: has the appraisal had its day?

The list of major businesses ditching formal performance management processes is growing, but what happens next? We asked the experts

It’s still up to HR to be the bearer of bad news
 
There has been so much media frenzy around performance management and the effectiveness of appraisals, and yet our research shows that 41 per cent of organisations in the Asia-Pacific region still rely on a once-a-year performance appraisal process. Plenty are opting for continuous performance reviews, such as monthly catch-ups, which is positive news – but progress is slow.
 
Managers in Asia are generally not very good at differentiating performance, or giving effective feedback, particularly when that feedback is negative. They tend to pass the blame to HR in the compulsory annual meeting: it becomes ‘HR wanted me to raise this with you’, which creates a negative perception of the appraisal process for both staff and leaders.
 
Consistently, research shows the old adage to be true – people join organisations, they leave managers – and yet organisations are failing to equip line managers with the necessary tools and training to become effective coaches, rather than ‘bearers of bad news’. As a result, line managers and supervisors do not feel valued in the performance management process.
 
Feedback is becoming more and more crowdsourced, with opinions sought from business partners, colleagues, customers or clients. Some companies have deployed social media techniques where continuous crowdsourced feedback is provided. This system won’t work for every situation or in every organisation, but feedback needs to be a continuous process in whatever form it takes.
 
Dhritiman Chakrabarti
Asia-Pacific leader for rewards, talent and communication, Willis Towers Watson
 
It’s hard to make decisions without a proper performance system
 
While there has been lots of market chatter about changes to the performance management process, few companies are actually taking action. And even the more progressive businesses haven’t done away with ratings altogether – instead, they have moved towards a process of frequent reviews, rather than a single numerical or alphabetical rating once a year.
 
But while HR managers in all sectors recognise that the current performance management approach is not perfect, there is a reluctance to ditch appraisals altogether. Without a quantified appraisal system, HR will lose a solid foundation on which critical decisions – merit increases, bonuses and promotions, etc – are based. There are concerns about how to be objective, consistent, fair and defensible in such decisions.
 
In some cases, managers are being asked to keep diaries or to record observations of behaviour to help them provide more specific feedback to their direct reports, which is helping blur the boundaries between goal setting, reviewing, feedback and actions. This suggests that rather than relying on a rigorous quantitative system, with a well-defined set of rules, employers in future will rely a lot more on good line managers who are observant and have good judgement to critique individuals’ performance.
 
Jackson Kam
Regional practice leader – talent strategy (AMEA), Mercer
Vidisha Mehta
Principal and talent strategy practice leader (Asia), Mercer
 
Managers don’t know how to appraise younger workers
 
There are some signs of a shift towards multi-sourced, regular feedback throughout the year, as the younger generation demands this of employers. But I don’t believe this shift is happening quickly enough.
 
Traditional employers are now dealing with a group of employees who want a lot more engagement, more conversations with their managers and guidance on how to improve. There is a big gap between what is being required of managers and supervisors today and their abilities to have those developmental, career management conversations. Managers in their 30s and 40s, operating in very traditional Asian organisations, are grappling with the demands of the new workforce, yet we don’t give them the soft skills to have those discussions and motivate people to perform better.
 
Increasingly, organisations are operating under a matrix model of management, so rarely do line managers see their direct reports on a day-to-day basis. This might explain the shift towards gathering feedback from additional sources of information for any one individual, but the results of 360-degree feedback are mixed.
 
Without over-generalising, the east Asian culture is typically more hierarchical in process. There isn’t a lot of room for debate, dialogue or frank discussion, and it is less culturally acceptable to give negative feedback about your peers or bosses. Asian companies are beginning to recognise that to operate in the global market they need to attract and retain international talent, and that means letting go of some of the traditional processes and embracing some better ones. Improving the annual performance appraisal process would go a long way.
 
Kwan Chee Wei
Adjunct professor, division of strategy, management and organisation, Nanyang Business School, Nanyang Technological University, Singapore
 
The west could learn from Asian appraisals
 
The organisations that I work with consider appraisals an important tool in their performance management processes, but they look very different to those seen in Europe. Appraisals here are typically very KPI-based, and incredibly detailed targets are set at the beginning of the financial year. In most instances, the measurement of performance is very strict.
 
People are not inclined to give feedback, which proves difficult for expat managers, for example, who have been trained to develop and respond to their direct reports. The detailed and strict targets employees work towards are almost spoon-fed from above. To encourage these employees to take ownership of their development would require a complete mental shift.
 
Typically, a manager tells a staff member ‘this is the result you need to deliver’, which they focus on doing without question and are then rated on at the end of the year. I have seen organisations that try to encourage leaders to give feedback, but they find it extremely difficult. And when they do, it doesn’t translate well.
 
Managers need to have confidence and not fear that their direct report will lose faith when receiving honest, constructive feedback. Having said that, I think the clarity you get from the Asian way of doing things would benefit western organisations. British appraisals, for example, can be pretty vague and target setting hasn’t always been effective – having set objectives at the beginning of the year, which both manager and direct report have written together, can help everyone stay on the same page.
 
Susy Roberts
Managing director, Hunter Roberts