The Right Way to Conduct Performance Appraisals

In my last blog post, I wrote about the annual appraisal, which is really an early to mid 20^th century tool that many businesses continue to use even though we're well into the 21^st century. The annual appraisal is flawed in so many ways that it's become useless, antiquated and disingenuous. Employees use what I call the “Santa Claus” theory to make themselves appear more productive by putting in a great effort in the weeks leading up to their performance appraisals. On the flip side, other employees perform excellently for most of the year, but they don't do enough to impress their managers during the few weeks when leaders are paying attention to performance. As a result, they are given appraisals that fail to reflect their true worth.

Complicating matters is the fact that Generation Y is becoming the dominant force in the working world, and this new generation demands a much different – and much more genuine – approach. So, what is the right way to conduct performance appraisals?

Real-Time Feedback is the Key

As I've written before, Generation Y will come to dominate the workforce in the coming years. At this point in time, every member of the generation is either already working, or preparing to enter the workforce by attending college, trade school or some other form of educational institution. This means that businesses have to start taking the generation seriously instead of treating them as some sort of curiosity.

Generation Y will demand what other generations have been wanting for some time – real-time feedback – and the businesses for whom they work will sink or swim depending on how they handle the needs of the so-called Millennials. However, this will require a significant shift in the ways that leaders interact with their employees.

Real-time feedback requires managers and leaders to eschew the old methods of conducting performance appraisals. They'll need to start paying attention to their people on an ongoing basis, and they'll have to adjust the ways in which they evaluate employee performance. But first, they're going to have to understand that these demands for real-time feedback aren't about fishing for praise. These demands come from a place of genuine authenticity, which is an amazingly positive aspect of Gen Y as a whole, and one that businesses should nurture if they want to remain relevant.

Adjusting to a Real-Time Feedback Model

Making the adjustment from conducting “annual” performance appraisals to performing real-time feedback is one that many companies will find difficult, especially those that are guided by Baby Boomers and Gen X-ers who don't know any other way of doing things. Here are some of the ways that leaders can adapt:

• Don't assume that when an employee asks a question about performance that he or she is looking for a pat on the back.
  In reality, the employee just wants to know if he or she is doing something the right way. There's no hidden agenda; only a desire to do a good job, help the company and grow.

• Stop waiting for annual appraisals to offer advice and direction.
  If a manager sees someone doing something incorrectly, it is the perfect opportunity to be a leader and help the employee by offering feedback immediately. Conversely, if a manager notices an employee who performs exceptionally, why should they wait a year to tell the employee, “Good job”?

• Stop ignoring opportunities to help your business.
  The workforce is the lifeblood of any organization, but too many managers seem bothered by the notion of interacting with their people. This is a poisonous scenario because so many opportunities for correction, growth and excellence simply pass by; all because “leaders” wait for performance appraisal time to provide feedback.

Consultants Are Going to Ease the Shift

Since there's such a disconnect between the older generations and Gen Y in terms of how feedback ought to be given, businesses that want to be successful are going to be turning to outside help in the form of consultants. Consultants who understand the authentic needs of Gen Y are going to be essential in the inevitable shift from the traditional way of doing things to the new standards ushered in by the next generation. That's why I believe that consulting is the best career choice for professionals who want to take their careers to the next level.

Performance appraisals can no longer be conducted in the traditional way if companies want to remain relevant and successful, which is why real-time feedback is so crucial to the future of business. Many businesses will find this out over time through trial and error. However, a large number of companies are going to be looking for assistance from consultants who understand what it takes to meet the needs of the changing workforce. Are you ready to help them?

Are you interested in learning more about the future of business and how consulting will help shape it? Check out our free consulting guides and download your free copy of Buddy Hobart's eBook, “Experience Matters.”