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Using an alternative performance appraisal can help improve staff retention

Alternative performance appraisal
Increasing the regularity of reviews can help.

Every business owner needs to know how their employees are performing and coping with the demands of their work. Choosing an alternative performance appraisal method can help with more than goal setting – it can help with employee retention and wellbeing, too.

Traditionally, employee appraisals are held every six months or once a year. The employee will sit down with their manager and discuss their work goals and targets, and build a plan for the year ahead.

The traditional method is often criticised for its “tick-box” approach. There’s a sense that the appraisal is something to be endured – rather than something that creates value for the employee.

Now, businesses are starting to challenge the status quo and take new approaches to performance appraisals. There’s a move to more regular and informal checkups, and a bigger focus on employee wellbeing both inside and outside the office.

We spoke to business leaders who’ve found success using alternative performance appraisal models.

Adopt a more regular performance appraisal system

Reading-based Active Workplace Services recently changed from an annual appraisal process to more frequent assessments of staff.

“Over the last two years, we found that the annual structure felt increasingly outdated and provided only limited benefit for our employees,” explained director Angela Love.

“By asking what value the annual appraisal model really offered our employees and the business overall, we were able to refine the format to be more than a tick-box exercise. We recognised that people still needed to be appraised, so we decided to move towards a self-appraisal model.”

Under the new system, each employee has regular monthly self-appraisals, where they meet with their manager to review performance against their objectives.

“It’s an opportunity for engagement. It also helps to build relationships with the employee and focus on their development within the company. These regular conversations provide a greater opportunity to hone skills, identify training or learning opportunities, and stay connected to the team,” Love said.

“We ask our people to tell us how they think they’re performing, and we ask what we could do better or smarter. This makes it easier for us to track improvements and spot issues before they have a negative impact.

“Most of all, it offers peace of mind to the employee than an opportunity to communicate is never far away. The opportunity to share successes and acknowledge exceptional performance comes around every 30 days, which is essential for personal development.”

Focus the conversation on progress and performance?

In the past, the firm found that employees had a tendency to link annual appraisals to salary reviews, often considering them to be the same thing.

“By moving to a series of short one-to-one meetings on a monthly basis, we’re able to focus the conversation on the individual’s progress and performance against their specific objectives. And we can assess their personal development opportunities. That’s what our appraisals are for – to support our employees and help in their development,” Love said.

“We believe that asking someone to self-appraise makes the process more meaningful and engaging. It provides the opportunity to talk about what’s working and what’s not, all in real time.

“Keeping employees feeling valued and engaged is essential to their productivity. That’s incredibly difficult to achieve if the opportunity to assess performance only comes around every 12 months.”

Use an alternative performance appraisal to build relationships

Suresite, a Preston-based retail services group, have also adopted an alternative performance appraisal system for their 49 staff.

Alternative performance appraisal - Janine Wilson
Wilson argues modern appraisal systems need to look at employee well-being.

Like Love, HR manager Janine Wilson believes the modern appraisal system needs to be focused on a continuous cycle. But appraisals shouldn’t just be about work performance – they also need to look at employee wellbeing, both in the office and at home.

“An annual review reflects on last year’s performance and sets new objectives in line with business objectives and goals. With our previous appraisals system, I felt that some of the set questions were too fluffy: ‘In this business, who do you aspire to be?’ and ‘Which areas do you want to work in?’

“They didn’t add value for us or the employee. Our employees thought the questions were monotonous and a waste of time.”

Wilson is now moving to more informal, quarterly appraisals with no set questions.

“We’ll be asking staff if they have anything they want to raise or make a priority,” she said. “We want it to be a relaxed and informal conversation – something they don’t dread being asked to do. The chat needs to flow naturally and be open and honest, rather than a stilted box-checking exercise.

“How are they? Is there anything going on that we can help them with? If we don’t ask these questions, how will we know what’s happening every day in the office? By doing this, we can build closer relationships.”

Show employees you care about their personal lives

In addition to defining employee training and performance needs, Wilson also wants to focus on wellbeing and mental health issues.

“In today’s society, there’s a greater awareness about the effects of mental health. As an employer, you need to know what’s going on in the personal lives of your staff and how that might affect their work. The only way to find out is to train managers in identifying problem signs and ask employees how we can help,” Wilson said.

“In our new appraisals, we’ll look at this area and ask how everything’s going at home. We need to demonstrate that we can take action to help our employees, like granting more flexible hours for mums who are struggling to juggle the job and children.

“This helps with retention, too. The employee won’t think they need to change their job just to get the help they need. If employers don’t tackle these issues, they will get left behind.”

Remember your appraisals are about people not processes

Helen Jamieson, chief executive of Jaluch, a Hampshire-based HR consultancy, recently rewrote her appraisal system to concentrate on agile performance management.

“It’s about people, not processes,” she said. “The employee can state how long they want to spend on the appraisal, whether it’s five minutes or two hours. We’re using a series of open questions, and we ask them what is and isn’t working in their role.

“The questions are much more relevant to where the business is now. One issue with annual appraisals is that they don’t relate to current issues. They’re always a year behind.”

What percentage of your staff have left in the last year?

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Last year, when the firm was gearing up for growth, appraisal questions revolved around upcoming changes: how employees were feeling, how mentally prepared they were and what support they needed.

With agile, they plan to look at building up the people skills of their line managers. “It’s about developing people skills, so they can engage in full discussions with staff, understand and take the necessary action,” she said.

For Jamieson, the key benefit of using an alternative performance appraisal system is retention.

“If I lose a member of staff, I’m distracted for a month finding a new recruit. With a more engaged and discussion-based appraisal system, I can help encourage employees to stay,” she said.

“Ten years ago, a typical HR consultant would stay between two and four years – now it’s eight years. Making changes to appraisals and performance management can be a big business benefit.”

Read more articles on employee evaluation.

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