The ideal annual appraisal
Anachronism or sensible format?
“Mr Meier, how would you rate your performance last year?” – “Super, of course! Or do you see it differently?”
“I’ll get to that. What was particularly positive for you, what was particularly negative?” – “My performance was positive. But I have the impression that this interview will not be particularly positive!”
“Okay, I’ll try it another way: do you enjoy your work in our company?” – “What kind of question is that? Are you trying to get rid of me?”
Conducting annual appraisals is often much more difficult than it might seem at first glance. Expectations collide. Hopes, wishes, worries. It is easy for the dialogue to develop in a direction that at least one party could not have foreseen. Or did not want to.
But does this mean that organisations should forego end-of-year exchanges? Are annual meetings perhaps an anachronism that no longer makes sense nowadays, only creates effort and, in the worst case, produces several losers? Or can it be a useful format that also offers advantages in today’s agile environments, in the VUCA world?
The difference between the annual and the year-end appraisal?
Is there a difference between the annual and the year-end appraisal? Yes, no, possibly?
Strictly speaking, there is a difference: the year-end appraisal takes place at the end of the year – more precisely, at the end of a company’s financial year. If a financial year ends on 31 July, a year-end meeting cannot take place in December. Well, certainly there are things in companies that are not really logical that are done nevertheless. Following the semantic logic, the annual meeting takes place once a year, at some point in the year, probably mostly at the beginning of a financial year.
Does it make sense to hold an annual appraisal only once a year? Semantically, certainly, but not in terms of content, because that would mean that the past and current year would be discussed in one meeting. Sounds like a very long conversation and not really ideal.
Could an annual review at the beginning and a year-end review at the end of the business year make sense? Definitely. (Interestingly, there are even tips that take this idea a bit further, but more on that later).
Are annual appraisal and year-end appraisal used synonymously in companies? Yes. It is not precise, but nevertheless often a reality. And that is why I use the terms synonymously in this post. Accordingly, “our” annual appraisal takes place in December.
The image of annual appraisals
When you tell your friends that your annual meeting is coming up soon – what is the reaction? “Great!”, or rather “Oh, you poor thing!”? Are you more likely to get an eye roll, a shrug of the shoulders or a beaming, encouraging smile?
The image of annual appraisals is probably more negative than positive for many employees. In fact, I fear that no one in your circle of friends will shout “Oh, cool!” at you, and that’s regardless of whether your friends themselves have already had the pleasure of participating in such talks. Often the very idea of an institutionalised format causes pure rejection.
That sounds harsh, doesn’t it? Yes, I find the statement harsh myself. But many companies “earn” this statement because
- communication is at best advertised on websites and in company brochures, but is not really practised in everyday life and in interaction.
- they have developed the annual exchange into an event that provides little or no value for the employees.
- they see the dialogue as an annoying duty and thus negate possible opportunities in advance.
Of course, a negative image does not just fall from the sky. Companies often contribute to it – unconsciously – by committing key mistakes.
Mistakes in conducting annual appraisals
There are three key mistakes in annual appraisals:
Mistake 1: Unclear discussion content
What is the interview about? Is it about personal performance over the past 12 months or individual development potential? Is it about responsibility, leadership, working methods, communication skills or salary? Is it about mutual feedback or the evaluation of projects and developments? In project management or in the development of products, one likes to speak of clarifying the order. And this is exactly what is often missing: an agreement on topics that will be discussed together. A definition in advance that provides a structure for preparation and subsequent implementation.
Mistake 2: Missing information
What was discussed at the last meeting? Those who do not document findings or results – here both parties are required, whereby mostly the manager looks “bad” if he or she does not remember contents or agreements – will almost certainly forget aspects that are important to the other party. With 12 months between the last and the current annual appraisal, with numerous meetings with employees and what feels like a thousand things going on every day, anything else would be a miracle.
Mistake 3: Monologue instead of dialogue
How can an unpleasant discussion situation be resolved? For example, by one party – usually the manager, but sometimes also the employee – talking endlessly and thus taking time off the clock on the one hand and on the other hand filling the vacuum that both sides do not really have anything important to say to each other. If a manager cannot say anything about an employee’s individual performance, e.g. because he or she has simply not noticed him or her, he or she does not have an eye for individual performance or the number of employees is too large for individual feedback, he or she can try to conceal this by endless monologues about the past business year or general ideas for the future. And suddenly the time for exchange is over, a lot has been said and very little has been said.
In addition to these three key mistakes, there are many small and large slip-ups such as
- clumsy timing (talks take place in the phase with the highest turnover, in the final phase of projects or parallel to important budget planning),
- lack of flexibility in terms of content (instead of addressing “new” topics such as managing employees in the home office, old interview templates or criteria are used for evaluation),
- lack of role model function (how do you think an employee will act in discussions with his or her staff if his or her superior does not give any priority to the exchange with him or her?),
- too many issues.
Especially the last point offers a lot of potential for improvement. What could you do, for example, if there were too many topics for a meeting? Well, maybe there is a small tip for this … 😉
Tips for an ideal exchange
When is an exchange between different parties ideal? When both parties consider it valuable. BOTH parties. If, for example, the annual appraisal only benefits the supervisor because she now understands her employee a little better, but the employee gets the impression that his feedback and suggestions are not taken seriously, then the exchange is NOT ideal.
Some publications recommend dividing the annual appraisal into three parts, as this provides both a structure in terms of content and time:
- Part 1 deals with individual employee performance,
- Part 2 revolves around common goals, and
- Part 3 covers personal development opportunities and individual goals.
In principle, such a structure makes sense; it could even be extended by 2 parts:
- Part 4 covers an evaluation of the supervisor by employees (which of course presupposes that there is an appropriate culture in the company and that feedback does not have negative consequences) and
- Part 5 is an opportunity to talk about “other issues”. Some employees may want to reduce their working hours, others may want to work more often in a home office and third are a fountain of ideas they would like to pitch.
Divide the conversation into five parts, then the talking points of the first four parts should be identical in all conversations between supervisors and employees, and the fifth part should offer space for individual points.
What other tips are there for an ideal exchange?
- A conversation without a set agenda quickly becomes a “chat”. As a supervisor, you should agree on an agenda in advance so that employees know what they can prepare for (3, 4 or 5 parts).
- An agenda is one thing, but a serious exchange with each other is another. From the employee’s point of view, it is very demoralising if the supervisor ends the conversation because the time has “run out”. Supervisors should build in buffers and add 5 or 10 minutes if necessary or arrange a second appointment if needed. For this to work, it makes sense to have a buffer between different appointments, and conversations should not take place at the last minute on 23 December.
- From zero to one hundred rarely works. If annual meetings are seen as a compulsory event, then you will not be able to change this with a snap of the fingers and a smile. But that doesn’t matter. Just make the most of the format. Exchange ideas with your counterpart on how to improve the format in the future. As a supervisor, ask how your employee would like to work together. And as a co-worker, provide your supervisor with ideas on how to improve communication in the future (ideally step by step).
- Notes are allowed and useful, especially if there are different topics to discuss.
- The conversation should be between two people. If an employee has more than one manager, then the managers could divide the conversations, or each manager has one conversation per employee. Opinions vary as to whether additional minute takers should or can be present.
- The participants should mutually ensure that each side has a similar share of speech. It is about a dialogue and not a monologue.
And last but not least: Both parties should see the dialogue as an opportunity and ideally agree on a continuous exchange beyond the annual meeting.
Continuous dialogue as an opportunity
Continuous dialogue sounds nice, doesn’t it? Continuous dialogue is an opportunity for all involved, isn’t it?
In fact, dialogue is also exhausting. It feels like we are constantly exchanging ideas, synchronising work, addressing impediments, conducting retrospectives – it’s always about talking, dialogue, exchange. One could almost get the impression that there is more talking than actual work. But: communication is the only way to cooperate efficiently and effectively with each other. It is the basis for successful development. It is the source of ideas and the improvement of services or products. Yes, communication is exhausting, but there is simply no alternative.
And it is precisely in this sense that an annual meeting can, may and possibly should also be exhausting. Ideally, it is a format that, although in name only takes place once a year, fits into a series of formats for communication, exchange, learning and alignment of ideas. It is formally the last conversation in a year, but it may be one that makes a loop around a common year of collaboration. And it should be a great basis for the first formal conversation in the new year, not an anachronism.
It is up to you and your organisation to make the ideal out of such a format. So make the ideal out of it!
“I have my year-end meeting coming up!” – “Really, what do you think about that?”
“We exchange ideas regularly, it’s just another conversation. But I have an idea for the new year that I want to present to my boss.” – “Oh, cool!”
Here are compliments to take away – a template you can easily use to put a smile on employees’ and colleagues’ faces.
Michael Schenkel has published other articles in the t2informatik blog, including
Head of Marketing, t2informatik GmbH
Michael Schenkel holds a degree in business administration (BA) and is passionate about marketing. He likes to blog about project management, requirements engineering and marketing. And he is happy to meet you for a cup of coffee and a piece of cake.