In a recent webinar, Clear Review, a continuous performance management software system, conducted a survey based on a pool of 200 UK-based participants that included HR executives, senior managers, CEOs and business directors and were from a wide range of organizations, including Oxford University Press, Vodafone, Perkbox, Next, Visa, HMRC and Odeon Cinemas Group. The survey showed that 65 percent of the participants were still using annual appraisals, the Clear Review press release said
The survey covered the performance management systems these organizations had in place - specifically whether they operated under a traditional, annual appraisal system, or whether they were utilizing a more continuous, agile approach to performance management.
Many articles have been written on the topic of annual appraisals and how they are becoming. Evidence has shown they are time-consuming and ineffective, and many global conglomerates have traded in annual appraisals for regular performance discussions, according to Stuart Hearn, CEO and co-founder of Clear Review.
Despite this, the results of the survey revealed that 65 percent of participants are still using annual appraisals. Of the remaining participants, 24 percent come from companies who are in the process of moving away from annual appraisals and only 11 percent had a continuous model of performance management in place, the release said.
Discussions took place from why modern companies are slow to adapt and accept new methods of managing performance and refusing to move with the times and advance to main concerns and what is holding them back. The Clear Review poll revealed that the following are the biggest reasons holding organizations back from transforming their performance management systems:
- The poll revealed 82 percent say they don't have the right software to facilitate a transition away from annual appraisals, either claiming "we haven't found the right solution" (53 percent) or "we have technology but it's not doing the job" (29 percent) - This is not surprising given that most performance management software is still based around formal annual reviews or appraisals. Whilst some of these systems have attempted to adapt in order to be more agile, this survey shows that they are not cutting it when it comes to embedding a continuous performance management approach. It's increasingly clear that in order for a successfully transition to continuous performance management, software that is purposely built for this is required;
- It was revealed that 60 percent of participants are concerned that they won't be able to get managers to have more meaningful conversations with their staff - Continuous performance management is unlikely to succeed unless managers are given appropriate training, guidance and support. They need to be shown the benefits of more frequent conversations and how to conduct them, including how to give and solicit effective feedback and how to keep performance discussions productive;
- Nearly a fifth of the participants weren't sure how they would track the performance conversations - HR needs to know that regular performance discussions are actually taking place, and they need an effective tool to track this. This is the only way of ensuring that employees are receiving the support they need. Software can be used to resolve this problem;
- The poll showed 12 percent state performance-related pay as an issue holding them back from continuous performance management - Many companies carrying out annual reviews use performance ratings to make decisions regarding bonuses and pay increases. Some are worried that agile performance management will pose problems in this regard. Whilst pioneers in continuous performance management have solved these problems successfully, the details of the solutions have not been well publicized and there is a lack of readily available, practical information on this subject; and
- Finally, 9 percent don't know how to convince senior managers that regular performance discussions are worthwhile - It can be difficult to convince senior members of staff to consider a radical overhaul. Many can become stuck in their ways and keep certain processes in place simply because "this is the way things have always been done". This reluctance to adapt and advance can cost a company dearly. If senior managers are to be convinced, they need the appropriate facts and figures in front of them to show the business benefits of regular performance discussions.