The Traditional Performance Appraisal will not provide what organisations need in the future. There are 5 areas observed where Organisation Development needs to think differently. 1. Formality of Structures and Controls
38% of employees are not happy with the performance appraisal (HR magazine 2009). The process typically has employees and managers following a set of procedures and rules, and inputting into an often poorly designed system. The amount of documentation required in this process has swamped managers. A study by Pace Productivity found 25% of their time was tied up with administration and 8% on their people. The organisations landscape has changed, as have employees. Organisations have become more organic, and technological capabilities increased. There is an opportunity to think differently. The annual cycle should be replaced if it is not working. For example, have simultaneous and multiple feedback opportunities for a person and their projects or tasks, which adds to their internal portfolio on a simple app.
2. Individuals and Teams
Often a company had not implemented a 360-feedback tool for all employees because of the systems, processes and possible misuse of data. The success of an organisation is dependent on the interdependencies between functions. The technology exists and more should be developed to make 360 applicable to all and not just those on a Talent Programme. Organisation Development professionals should reconsider the value of feedback to an individual and team.
3. Employee Involvement in the Process
Employees should be more empowered to input into Performance Feedback as a two way process. Why not give them the ability to say if they are at risk, or if they feel they are ready for a career move. There are parts of this in Talent Programs, but here I am talking about more instant and simultaneous feedback.
Intrinsic V Extrinsic Reward
What works in one region may not work in another. In some cultures where emphasis is placed on Holism, The Collective and Family they may be more motivated by group rewards. As opposed to Individualist cultures who may be more motivated by the achievement of individual level objectives. The implementation of scorecards seem to have been taken as too rigid a structure, but in the future the individual, team and unit can be varied to the cultural fit of the country (if organised that way).
Frequency of Feedback
Frequency of feedback is still too often pegged as an annual process, and in some companies it is a challenge to get it completed at all! Typically there is a conflict with production cycles, and the sales processes because the process is viewed annually in alignment with the Reward process. The structure and controls need to be scrapped to let feedback breath in the organisation. This needs clever design, engagement and encouragement of feedback as well as the tools to support it.
There are obvious challenges in implementation, but a good OD professional will be able to understand and build the right solution. It is important to consider the traditional application of these points. If you have more insights please share.