Before You Get Rid of Your Annual Evaluations, Read This

A new Australian study has shown that annual evaluations still hold value in the workplace and it would be unwise to get rid of them. Here are the study’s highlights.

Deemed ineffective and unsatisfactory by both managers and employees, annual assessments have been challenged in recent years. Several major companies like Deloitte, Accenture and Adobe even decided to cut the process out of their company’s culture.

A new study, however, reveals that removing them completely would be no miracle solution. A survey by the Australian company CEB conducted among 9,500 employees and 300 HR managers shows that the productivity of top performing employees actually decreased by 28% after performance evaluations were abandoned. This can be explained by the lack of recognition and feedback.

Similarly, the survey revealed that the quality of discussion with managers decreased for 14% of employees where employers no longer conducted annual assessments.

Why turn away from annual assessments?

Over 90% of current performance management systems do not experience success, and only 5% of HR professionals are satisfied with their process, according to a survey from the Society for Human Resource Management.

We can understand why some companies thus decide to abandon this effort. “We carry out a process where we evaluate the need for development, we set individual goals, we decide who we grant promotions and increases to… That's a lot of impact for an evaluation process that occurs only twice a year and is subject to past events which are now impossible to change,” says Sylvie Gregoire, CHRP, and President of Totem performance organisationnelle.

And this doesn’t take into account that, in addition to being ineffective, these performance management systems are extremely expensive. It costs more than $7,000 per year per manager, or 200 hours per year based on an average salary of $60,000.

Finding a happy medium

So, if the performance evaluation process does not yield proper results, and you do not want to demotivate your employee base, where should human resource professionals turn to?

“Employees need to have feedback and strategic alignment,” states Grégoire. “If we decide to abandon traditional assessments, something else should replace them.”

Coaching can, for example, be a good alternative. “This allows employees to get feedback on a more regular basis and it addresses areas for improvement, in addition to allowing employees to monitor their own performance by finding solutions to improve themselves,” she adds. 

Employees therefore take ownership of their own success and will maintain that sense over time as if it were not imposed on them. However, it is still necessary that managers be continuously effective in their coaching… otherwise you return to the same dissatisfaction as with annual assessments!

“An employer may also develop their own version of coaching, for example by focusing on one aspect of performance for three months, then another for the following three months and so on," states the President of Totem.

Most importantly, each company must find a means of evaluating employees that works for them.

 

Sources:

Statistiques efficacité des évaluations de rendement : http://www.slideshare.net/7Geese/future-of-performance-management-2015-and-beyond

Coût des évaluations de rendement : https://www.linkedin.com/pulse/performante-votre-gestion-de-la-performance-gr%C3%A9goire-mba-crha#_ftn8

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