The Annual Appraisal: Does it Really Work?

The annual appraisal is a staple of corporate life, and it's the sole means of doling out feedback on employee performance for many businesses. Unfortunately, annual appraisals are rarely done on a yearly basis at most companies – they simply aren't a priority for most business leaders. What's more, these appraisals usually only take the last two to three months into account. Managers just don't have the time or interest to keep tabs on an employee for an entire year, it seems, so employees never get the type of feedback that they truly need in order to perform their jobs more effectively. Clearly, it's time for a new direction when it comes to the appraisal process.

Stick a Fork in the Annual Appraisal

Although the dinosaurs of business will probably continue to squeeze as much life as possible out of their outmoded ways of operating, I believe an important shift is happening. Thanks largely to the emergence of Generation Y, traditional performance management is dead. Put a fork in it. It just isn't useful in the modern business world anymore, and it will never return.

The annual appraisal is a relic from a time when the Traditionalist Generation needed tools to manage the workplace and its employees. In the decades following World War II, these employees consisted of Baby Boomers. Then the Baby Boomers shifted into leadership and Generation X began to take over the employee ranks. However, the traditional style of evaluating employee performance has changed very little over the years. Sure, it's been revamped, and it's become tied to employee salaries, but the changes to this style of giving feedback never really improved it.

Here is a breakdown of the reasons why the annual appraisal doesn't work anymore:

• The fact that it's tied to employee income means that it's not really about performance

• A majority of managers only look at the most recent eight to twelve weeks of performance

• It's too easy to make the annual appraisal a low priority, which is why they often get pushed further and further back into the calendar

• Feedback given during these appraisals is rarely genuine or authentic

• Many companies are now using books and computer programs to find the right words and phrases to use when evaluating employee performance instead of paying attention and offering actual feedback

• Members of Generation Y demand authenticity and real-time feedback, neither of which are provided by the annual appraisal model

Generational Shifts

Baby Boomers and Gen X-ers rarely questioned the effectiveness of the annual appraisal; the idea that no news is good news has been drilled into their heads so deeply that receiving feedback almost feels alien to them. They've been working in a corporate world that has always operated in this fashion, and it's never occurred to many of them that there is a better way.

Thanks to the emergence of Generation Y, things are starting to change. This up-and-coming generation, which will form the core of the business world for the next few decades, has a different view of how feedback should be given. They want authenticity, and they genuinely want to know if the work they are doing is satisfactory, or if it requires improvement. Some members of the older generations might think that this attitude means that Gen Y is constantly looking for pats on the back, but nothing could be further from the truth. The fact is that Gen Y wants to perform meaningful work, and they're looking to their leaders for honest direction and feedback that they can actually use to improve performance. Eventually, Generation Y is going to force a shift in the feedback process whether the old guard likes it or not.

The Role of Consultants

Consultants will play a huge role in the upcoming years as businesses try to figure out how to create workplaces that attract and retain the best employees from this new generation. They'll need to introduce new ways of providing feedback, and they'll have to convince Baby Boomers and Gen X-ers that the system that they had worked under for so long is old, antiquated and ineffective.

If you're looking for a challenge in your career and you're interested in helping businesses learn to use 21^st century tools instead of relying on early to mid 20^th century approaches, it's time to consider consulting. Gigantic shifts are occurring in the business world, and human capital consultants will be needed to help leaders steer their organizations in the right directions, particularly when it comes to providing feedback to employees. Are you up to the challenge?

I'll be discussing alternatives to the annual appraisal process in my next blog post, so stay tuned!

Are you interested in learning more about consulting as a means of helping businesses adapt to a new generation? Ex3 Matters has many excellent resources available. Buddy Hobart's eBook, “Experience Matters,” contains fantastic insights about consulting, and it's available for free. You can also download the free Ex3 Matters consulting guides, which are loaded with detailed information about working as a consultant.