Time for a Change?

04 October 2018
Time for a change

The End of the Annual Appraisal?

Future Trends in Performance Review

Always a great conversation, and in the current climate when more and more organisations are having to focus on finding and keeping the right people, performance review is currently a hot topic and right now is seeing now seeing some interesting development trends. How do they match up with your organisation?

1. Less Quantity and More Quality Conversations and Feedback

Companies of all sizes are now moving away from annual appraisals to more regular ‘check-ins’ and frequent real-time feedback, and the redesign of performance review is now a high priority for 79% of businesses according to Deloittes. This means an increasingly employee focused and less process driven approach which encourages almost exclusively future-focused, developmental feedback, rather than being a review of past performance.

Crucially, managers and employers are having to come to terms with the fact that we’re now living in an employee-driven market and if businesses don’t focus on employee development and growth, through constructive forward thinking performance conversations, they will simply fail to keep hold of top performers.

2. Performance Review Systems Will Strive Towards ‘Simple’

Over the last decade, performance management became increasingly complicated as many organisations focused on measuring performance and linking it to pay, However, research has proved that these processes don’t actually result in reliable data and may potentially damage employee performance and engagement. As a result, companies are increasingly following the example of employers such as Microsoft who have stripped out complexity such as annual appraisals and competency assessments, focusing instead on more informal but regular quality performance conversations and feedback.

3. Companies Will Change the Way They Manage Performance-Related Pay and Bonuses

Some companies are struggling to understand how to handle performance-related pay and bonuses under a continuous performance review model, and so predictions are that some companies will abandon performance related pay entirely in 2018, and instead, base pay decisions on market rate and responsibility and bonuses on team or company performance. This removes the subjectivity that can often found in performance-related pay and saves significant time and effort.

4. The Focus of Performance  Reviews Will Shift 

Traditionally, performance review has focused on giving performance ratings and appraisal completion rates. However, as businesses make the transition from performance measurement to performance improvement, the data they need will change, and so companies will increasingly be evaluating the quality and impact of performance review conversations between managers and employees. Continual review will be needed to understand who the best managers are, and which managers need coaching and support to better develop their teams, by having constructive and meaningful conversations with their employees.


Need some support in developing or perhaps updating your current performance review or appraisal systems, then contact us at info@inspiringhr.co.uk  www.inspiringhr.co.uk



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