Continuous appraisal more helpful than performance reviews

In the current complex, uncertain and volatile business climate, traditional annual performance reviews are no longer fit for purpose – this according to the findings in the Performance Management Report, published by the Top Employers Institute.

The study is based on a global HR Best Practices Survey among 600 companies in 99 countries.

As organisational structures become flatter and more agile, individual performance needs to be measured in a different way.

Samantha Crous, regional director Africa and Benelux – Top Employers Institute says: “High performing employers are opting for more transparent goal setting and regular feedback – 91% of the organisations that achieved the Top Employers certification now consistently re-align performance goals during the year in response to changing business needs.”

Top performing employers are choosing a simpler and less formal process of reviewing performance that puts greater emphasis on coaching opportunities, ongoing dialogue, an employee’s ability to collaborate and the impact they have on their team.

David Plink, CEO of the Top Employers Institute, says: “A key finding of our study is that Performance Management evolves from an annual event with rigid objectives to a transparent process of continuous dialogue, with flexible goals, that is more embedded in day-to-day operations so it can better deal with change. Companies that become Top Employers redefine performance as the ability to collaborate and contribute to the success of a team. We are definitely on the verge of a paradigm shift in the way we look at Performance Management.”

Previously the focus for Performance Management was on the individual and individual tasks. But as many companies foster a more connected and team-based working culture, key capabilities are now social awareness, agility and flexibility so that top performing companies aim to assess the effectiveness of employees in the broader work environment.

As a consequence, Top Employers are increasingly encouraging their teams to be more involved in their own Performance Management to feel in control of their own progression. In South Africa, 84% of the participating organisations take colleagues input into account for the performance evaluation.

Microsoft, a certified Top Employer Africa 2015 has completely overhauled its existing approach by removing all ratings in favour of a new, conversation-based approach to performance. Lisa Dodge, Director Global Performance Programmes and HR Africa at Microsoft, says: “Traditional performance management was not going to get us where we need to go. We redefined performance as the actual impact an employee has on a team, business or customer.” In Africa, Microsoft is a certified Top Employer in Egypt, Kenya, Nigeria and South Africa.

Finally, the survey highlights a weakening link between Performance Management and compensation, with only just over 10% of participants considering an important objective of the process being to provide a basis for salary increases. This shows how the overall objectives of Performance Management are changing. A rigid link between performance and pay enforces a strong emphasis on individual performance, but is not effective when looking at an employee’s contribution to the performance of the organisation or the development of other employees.

The full Performance Management Report can be found at http://www.hr-insights.top-employers.com/report-summary-performance-management. The Top Employers Institute globally certifies excellence in the conditions that employers create for their people. More than 960 Top Employers were successfully certified in 2015.

Watch the Performance Management interview here: https://youtu.be/BH6DJQN3Cek.

Useful resources:
Top Employers Institute
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