Old employee appraisal is dead. Welcome, modern daily review!

Staff performance evaluations or employee appraisals are crucial for any organisation since they assist in determining employees’ contributions and an appropriate level of compensation for their efforts, such as a pay raise (pay rise) or award or reward or promotion or a combination of these. Effective quality assessment techniques also assist businesses in determining where their employees stand in terms of their acquired skills, talents, skills-application and potential flaws. The annual performance evaluation process is vital to an organisation to measure productivity and develop ways to achieve better results. Globally, the world of work has changed with the advent of COVID-19 pandemic. More people now work virtually and expect to get the results of working together or more.

Employee performance assessments are conducted in the form of a ‘yearly performance review’ or a ‘bi-annual performance review’ or a ‘quarterly performance review,’ in which an employee’s overall performance and output are assessed against a set of clearly defined requirements/standards. Performance management is indispensable not only because it determines an employee’s salary increase and promotion, but also because it correctly assesses an employee’s abilities, strengths, weaknesses, opportunities and threats. Performance management is a prerequisite for sustainable growth of organisations. Mostly, performance evaluations happened once a year and were primarily concerned with analysing prior performance and future expectations.

Modern employees’ reviews are no longer an annual or biannual or monthly or weekly ritual. It is a daily routine in appraisable organisations. In some organisations, it is weekly. Brian Jensen once told an audience of human resources executives in 2002 that Colorcon, a company in the pharmaceutical industry based in Harleysville, Pennsylvania, where he was the head of global human resources, was not bothering with annual staff reviews anymore. All in the audience were appalled. In that presentation at the Wharton School, University of Pennsylvania, Jensen explained that Colorcon had found a more effective way of reinforcing desired behaviours and managing the performances of employees: line supervisors were giving human resources staff and, in some cases human resources consultants for staff daily appraisal, instant feedback, tying it to individuals’ own goals, and handing out small weekly bonuses to employees they saw doing good things and rebuking those that lagged behind.

In the past, it seemed profane to think that the traditional appraisal process and its outcomes can be jettisoned. Amazingly, that is the reality on ground. What we now have is that over sixty percent of business organisations, according to researchers, are now adopting modern methods of employees’ appraisal in the world. From Soho, in the West End of London, to Manhattan in New York, to La Defense, in the West part of Paris, to Pudong in Shanghai and to Sydney Central Business District in Sydney, organisations are replacing annual reviews with frequent, informal chats between managers and employees. In a recent report, annual employee appraisal was described as ‘old-time practice’. Invariably, a lot of organisations in Africa are now using modern methods of staff evaluation. They have found out, painstakingly, that the annual ritual tagged employee appraisal or staff evaluation exercise is not achieving desired results of organisation development.

Foreign companies, especially those in the technology sector, like Toshiba, Huawei, Sage, Aveva, Dell, Juniper Systems, Microsoft, and IBM are in the forefront of this practice. Professional services firms, like Knight Frank and Rutley, Deloitte Touche, Accenture, PriceWaterhouseCoopers (PwC), are early adopters from other industries. Surprisingly, most public sector organisations – ministries, departments and agencies – still adopt the old traditional appraisal system where day/s are devoted to appraise the performance of employees over the previous year. This ineffective appraisal system is used to promote employees and increase their pay, but not to demote or assist them in the skill sets that they are lacking. A lot of organisations are reviewing their employee performance management methods because employees performance assessment requires more than an annual routine of questions and answers. It involves allowing employees to set how they want to be evaluated.

Without a doubt, the traditional employees’ evaluation method is a waste of time and money, and it is ridiculous. In some cases, senior workers and or consultants are contracted to appraise the workers over an exercise covering a day, some days, one or two weeks depending on the size of the organisation. How do you effectively appraise somebody that you do not know his or her background or see in his or her working position? The old performance management style stifles creativity, generates mountains of paperwork, and serves no real purpose. Others have described the annual performance reviews as olden-days models and claimed they do not encourage collaboration and innovation. Employers are also finally acknowledging that both supervisors and subordinates deride the appraisal process as it can be a witch-hunting exercise. Appraisal in a formal setting and in a predetermined day/s put the appraised at alert.

The biggest limitation of annual reviews is that reviewers lay heavy emphasis on individual goals and not on who assisted the performers or how the jobs were performed. Reviewers/appraisers also place high premium on financial rewards and punishments and their end-of-year structure, they hold people accountable for past performance of the organisation at the expense of improving current performance and grooming talent for the future, both of which are critical factors that can ensure organisations’ long-term survival. In contrast, regular discussions about performance and development can change the focus of appraisal from fault-finding to building the workforce of an organisation that needs to be competitive now and in future. Business researcher, Josh Bersin, estimates that about 70 percent of multinational companies are moving toward this model of daily or regular and informal appraisal. Organisations are also keen more on talent-hunting than employees’ achievements during appraisal exercise.

Modern appraisal systems deemphasize the long gestation period before high-performers or weaklings are recognized. Waiting for a whole year before an employee is appraised means that havoc may have been done where the employee is finding it difficult to meet targets and the high-performing employees may not be discovered promptly and assisted to break records and raise the bar! The tension between the traditional and newer staff evaluation approaches stems from a long-running dispute about managing people. Modern people managers are now promoting modern appraisal methods which support employees to give their own targets and determine the way they work with less interference. Should you focus mainly on motivating the strong and highly performing workers with money and getting rid of the weak ones? Or are employees malleable? Can you change the way they perform through effective coaching and management and intrinsic rewards such as personal growth and a sense of progress on the job? These are some of the concerns of modern evaluation methods.

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