Appraising Appraisals: why your operation should consider using them
Appraisal systems are a widely used tool in the business world. But in recent years, they have begun to fall out of favour in some leading organisations. Dell, Microsoft, IBM and Gap have all abandoned appraisals in recent years. Is the time right to give appraisals the boot? Or is there a better option? And can we make them work for our transport, warehousing and logistics operations?
The concept behind appraisals makes sense. As employees we are often told that appraisals are a resource.
An appraisals system gives us a way to try and make the most of that resource. This includes a means of measuring performance or progress and providing useful feedback.
Appraisals can help in identifying problem areas or employee strengths that can be harnessed. The right support at the right time can help turn stragglers into leaders or boost contenders into champions. Appraisals are a great way to take a breath and pause for a moment while you consider: how am I doing?
Some supporters even argue that appraisals can motivate employees if they are tied to compensation systems but – for reasons we are about to get into – we strongly advise against linking the two.
Issues with Appraisals
Despite the seemingly clear advantages of such a system, appraisal systems have been criticised in recent years. Most of the criticisms seem to focus not so much on the idea of checking in to give feedback as to the methods that are used and the tendency to use appraisal as an ‘employee ranking’ system.
Many appraisal systems rely on managers giving their employees rating or scores. Coming up with a decent set of criteria to judge employees by is hard. If you get it wrong, you may not be able to judge performance fairly. That can be a big stress for both managers and employees. Plus, if the managers in your team have even slightly different priorities, personalities or viewpoints, they might evaluate exactly the same performance two different ways. That’s bad news if you are tying appraisal systems to rewards or rankings; it just isn’t fair, and everyone will be able to see it. A poorly designed appraisal system is worse than a waste of time. It’s a big demotivator.
So how do you get around these problems? If you want the benefits but none of the headaches, here are a few pointers.
Give up on the grail of objectivity
One of the biggest problems with many appraisals systems is that they are meant to be objective. But the systems put in place to achieve this often ignore a simple fact – managers are human. Their judgements are subjective and personal. Perhaps a more sensible approach is to lean into that and abandon the idea of coming up with a precise, scientific system for ranking employees against each other. Instead, use the process to take stock, check in with how employees are feeling, identify potential issues and opportunities, and find areas for growth.
Avoid criteria and scoring systems altogether
The problem here is that we’re not machines. Measuring performance isn’t like measuring fuel consumption. People are complex. There are simply too many variables at play to measure everything. And how do you even measure something like motivation or skills development? Rather than trying to break a job (or a person) down into a set of categories, look at things holistically. Fortunately, people are much better than machines at two crucial things: storytelling and big picture thinking. Don’t bother with stats and tables. Focus on talking through real events which have happened, and use those as a springboard for personal reflection, goal-setting and coaching.
Keep it Simple, Rinse and Repeat
It can be tempting to try and micromanage, but avoid this temptation. Lengthy, excessively formal appraisal systems are a lot of work. That means they are an opportunity cost. You spend time doing them instead of doing something else. In order to justify appraisal, it actually needs to help make you money! So do it, but use a light touch. Don’t fall for heavyweight, all-singing all-dancing approaches. Even if they work properly, they’re unlikely to be worth the cost. And frequently, they cause more problems than they are worth.
Better systems are agile, quick to implement, and easy to repeat. Check in little and often. Evidence from the education sector tells us feedback is vastly more useful when you get it soon after a learning experience. Wait too long, and the opportunity is lost. Having frequent check-ins can also help create a feeling of connection between managers and employees. They show the team is invested in making things work, together.
To help implement appraisals systems into your SME operation, we have identified a few useful resources to help get you started.
- CIPD: Factsheet on Performance Appraisal
- Michael Page: How to conduct a 360 degree appraisal
- Small Business: How to conduct staff appraisals and keep everyone motivated
- Michael Page: Making the most out of your appraisal
For further guidance and support, a range of useful resources can be found on the Talent in Logistics website here.