4 Tips to Design an Appraisal System Fit for the Modern Workplace

Motivated employees are the backbone of an organization’s success. Companies are constantly looking for ways to engage and satisfy their internal customers, and appraisal season is a definite chance to do so. However, appraising employees in modern businesses has become more challenging. Let’s say a high performing sales person fails to deliver a big order at the end of the quarter, just before the annual appraisal. On the other hand, an average performing team member makes a big leap by onboarding a new client. This presents a tricky situation for their manager who is now looking to evaluate their latest performance while keeping their past track records in mind. Traditional performance management systems with long evaluation cycles create similar challenges for employees and managers at a time when organizations are embracing the gig economy, a liquid workforce and flexible job roles.This has led to 67% of Indian companies having revamped their appraisal systems to suit the modern industry requirements, including companies such as Cisco, GE, IBM and Goldman Sachs.

If you are looking to create a more effective performance management system for your modern business, here are four ways to do it.

• 1. Ensure unbiased appraisals using technology-based assessments

  Digital performance management tools help organizations overcome several deterrents in the evaluation process. From personal biases that cloud the judgement of managers to recency bias that gives greater weightage to the most recent performance, there are several challenges to achieving transparent and error-free decision making. Using scientific assessments to evaluate employee performance is an advanced and fool-proof way of tackling the impediments in the performance management process. Online performance assessments allow easy progress tracking with continuous feedback and instant information. Forward looking companies such as Mahindra and Mahindra and Siemens have incorporated digital systems for recording and reviewing performances. At Siemens, employees log in their tasks in a ‘digital diary’ round the year.

• 2. Tie evaluation criteria to measurable outcomes

  Evaluating performance based on manager perceptions or the most recent business outcomes can be detrimental for employee morale. Designing a clear matrix for quantifying and measuring employee performance is an essential first step to boosting employee performance. Google’s innovative performance management system is a great example. The company’s ‘Objectives and Key Results’ (OKRs) is a system that allows employees to set goals and track their progress using a set of milestones. The system is implemented across the enterprise, including the C-suite.

• 3. Arrange regular one-on-one meetings to help employees look ahead

  Until recently, performance evaluations were tedious and time consuming processes that were performed only once a year. Today, businesses operate at digital speed. In the current environment, performance management cannot be effective if it is a one-time, annual activity. Agile goal management, regular check-ins and consistent feedback are essential to boosting the strengths of employees and straightening any kinks in the processes. 91% of companies that implemented continuous performance management have been able to make better people decisions leveraging data. Adobe, for instance, introduced ‘check-ins’ in its performance management process by forming a special taskforce. The taskforce aimed to create not only a seamless review system but also a more interactive and open work environment.

• 4. Use self-evaluation and peer evaluations

  As organizations become increasingly flat and job roles expand to become more cross-functional, deploying a combination of self and peer evaluations makes sense. The open performance evaluation strategy is most effective in getting objective and relevant feedback from team members. Microsoft has completely rooted out its traditional performance management practices and moved towards leveraging peer evaluations. Such an approach fosters an environment of continuous growth and learning, resulting in improved employee experience.

In order to adapt to the changing corporate structures in the digital age, leading organizations are doing away with formal, bell-curved annual performance appraisals. They are focusing on becoming more flexible and continual in the way they offer performance feedback. Continuous performance management and tech-integrated performance management systems will increasingly take center stage in creating a highly agile process that is better aligned with the current industry trends.

Sources:

• economictimes.indiatimes.com
• deloitte.com
• cmswire.com
• linkedin.com