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Blog : Should you scrap annual appraisals?


Should you scrap annual appraisals?

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By Jane Sunley, best-selling business author and Founder & Chairman of Purple Cubed

In recent times, the annual appraisal has been much maligned with some companies scrapping them amid much publicity and fanfare – in some cases, the only thing missing was a marching band!

In 2015, Accenture publicly ditched annual appraisals for all 330,000 of its employees in favour of ongoing performance reviews. There was overwhelming support for Accenture; with many HR and talent professionals speaking out about the pointlessness and ineffectiveness of annual appraisals. Many continue to berate their usefulness, seeing them as mere tick-box exercises that force futile, awkward and often demoralising conversations. In their place, the ongoing performance review, which promotes frequent dialogue between individuals and managers, is championed.

There is no question that ongoing reviews play a vital role in effective talent management and engagement, however, they inevitably focus on the day-to-day; the company, the role and its outcomes. The ‘bigger picture’ can often get lost in these discussions, such as the individual’s aspirations and career plans. This is where the more formal annual appraisal comes into its own. It provides an opportunity for both the individual and the business to look to the future; to assess and plan and to be fully transparent about where each is going. After all, managing aspirations fully and transparently is key for engaging and retaining talented people. Annual appraisals can also help the business with succession planning and creating a leadership pipeline to ensure the right people are in the right roles, at the right time. It is important that such crucial conversations don’t get lost in the more mundane day-to-day chats.

So our view – don’t be too hasty about ditching annual appraisals. They have a key role to play alongside ongoing reviews. But it is important to get them right – this means approaching and managing them effectively so they aren’t viewed as a waste of time. The key to success is ditching error-prone and manually-intensive paper-based processes in favour of a digital system. This is the only way to accurately record and follow-up key information about an organisation’s people while ensuring appraisals have usable data outcomes.

The case for investing in a digital talent management system is overwhelming, with benefits ranging from time savings, reduced recruitment costs and enhanced productivity through to improved engagement and fewer grievances.

Technology, however, cannot operate in a silo; the business’ culture and processes need to support the ‘techie stuff’ if talent management is to be done right. This means HR managers relinquishing control of the ‘people stuff’, instead providing managers across the business with responsibility and input into talent management. By democratising rather than centralising most things people related, including the performance appraisal, a more rounded approach to people management is possible, thereby fostering a greater understanding of individuals, their roles and career aspirations.

The perfect talent management formula isn’t rocket science but it does need to be executed properly; review regularly, appraise annually and support all performance discussions with the right systems, processes and mindset. Get this right and your business will make the most out of the talent it has while effectively planning for the future.


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