Australia’s ANZ Bank decided to adopt a new path around 10 years ago, to boost earnings and productivity by changing the bank’s cultureAlthough performance evaluations do not necessarily result in immediate or tangible improvements, even when conducted regularly, moving away from them completely may also be unwise.
Performance appraisals have been a fixture in a variety of organisations for decades; however, increasing numbers of top corporate businesses are moving away from the process, preferring to adopt a more casual and informal approach. When big businesses make changes, the media typically uses punchy language to describe these developments; however, believing that appraisals should be abolished completely because they do not work would be severely misguided.
The CIPD has recently published a report detailing the findings from its latest research into performance management techniques. In this report, it is emphasised that the vast number of articles written about modern alternatives to appraisals do not provide much substantial evidence as to their overall effectiveness in helping to improve employee performance.
Aiming to understand which techniques provide results, the CIPD’s research cut through the peripheral information to analyse the evidence from metastudies and other academic studies. Focusing on two fundamental factors within measurable performance management, appraisals and goal setting, the studies considered the intrinsic value contained within evaluation and constructive feedback and whether either technique proved to be more useful than the other.
The CIPD discovered that although setting goals is an important part of progression, it is not always simple to apply these goals to tasks that need to be completed. This can result in a misdirection of time and energy that may be better placed elsewhere.
Goal setting can work especially well when applied to tasks that are relatively simple and where the outcomes are very specific and predictable because there is something clear and tangible to work towards. When jobs begin to get more complicated, however, a more malleable framework may be more effective for improving overall performance. This encourages individuals to focus closely on the task at hand rather than trying to aim for a result that is not clear or is subject to change.
Clearly, the vast majority of roles within the workplace require a mixture of simple and more complex tasks to be completed. This is why goals must always be closely considered, but goals are not enough to drive performance on their own. How can an individual know whether they are making progress towards reaching a more complex goal without detailed feedback or evaluation?
Unsurprisingly, feedback is important; however, one of the most interesting findings the CIPD has made is that the way in which feedback is given makes very little difference. Provided the information is detailed, relevant and relayed clearly, an in-person meeting or discussion has the same impact as looking at guidance delivered through an app or reading information delivered via email.
If companies decide that the traditional appraisal is something they would like to keep, the CIPD suggests asking for employee feedback on the process to ensure that individuals feel that the process is beneficial and fair and leave feeling enthusiastic about the future of their role.
Performance management is not an easy process; however, investing time into optimising whichever management method is chosen has the potential to contribute hugely to the overall performance of an organisation.
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