The annual appraisal which looks at how well someone meets objectives set twelve months previously is no longer valid. It may have been of use in the early 20th century when it was possible to predict year on year what needed to happen but those days are gone.
In today’s world with its ever ever changing fashions, expectations and connectivity that transcends time zones the concept of fixing personal objectives at the start of the year and then reviewing them at year end is largely redundant. Objectives set today can be rendered useless tomorrow by a competitor’s offering from the other side of the world. With the best of endeavours no-one can possibly keep track on what the rest of the business community is doing. This is probably one of the drivers for more and more businesses focussing solely on what they can achieve themselves – it’s what successful businesses have always done.
The concept of the annual appraisal is linked with annual pay rises. Again, these are largely extinct so why the continuance of such an outdated way of assessing an individual’s performance? Good practice has always been for leaders and managers to provide regular feedback on how people in their part of the business are doing. This can be group and individual based and with ever more emphasis on collaboration between people and groups the assessment of group performance must surely trump individual performance – the whole is greater than the sum of its parts isn’t it?
So how should groups and individuals be assessed in today’s environment? Criteria that all businesses, leaders and managers should be using to assess performance of their people and teams must be related to business outcomes.
Proactively meeting customer needs
All groups and individuals have customers whether they are others internally within the business or whether they are real paying customers on the outside world. Cutting through red-tape, working closely with customers to really understand what their needs are and then delivering them (or not if that’s appropriate) are all outcome focussed, i.e. they contribute to the bottom line.
Anticipate what’s required before it’s needed
Rather than just doing what it says in a bland and outdated job description for businesses to thrive and even survive in the current climate it needs everyone to be on the lookout for what needs to be done next. This isn’t just a marketing or strategic thinking activity it’s the responsibility of everyone in a business. The front-line experiences dealing with customers and suppliers are what should be driving new business ideas and innovations.
For a new and more effective appraisal system to work based on being responsive, anticipating what’s needed and satisfying customers requires agility, flexibility and the willingness to make changes as and when they are needed. This is needed throughout an organisation. People will naturally, given a climate of ‘meeting the numbers’ focus on the SMART objectives in their annual plan which hardly encourages collaboration.
Take those SMART objectives away and replace the annual plan with group objectives and behaviours that people are encouraged to strive for and a very different culture can be created, one that has business outcomes front and centre.
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© Paul Slater and Reflect & Lead, 2014.