Majority of companies are planning appraisals rethink

Finds PwC, By Hayley Kirton, 30 Jul 2015.

Employers and staff want more continuous and regular feedback.

Two-thirds of large companies are considering revamping their appraisals process, with one in 20 looking to scrap formal evaluations entirely, PwC research has revealed.

PwC’s 2015 Performance Management Research revealed that more companies were focusing on creating a continuous feedback culture, rather than relying on once-a-year reviews.

Alastair Woods, director in PwC’s reward team, told People Management that technological advances and requests for more immediate feedback from younger generations, combined with economic recovery, meant employers were re-evaluating their performance management processes.

“There’s a real sense employers are thinking, ‘how do we get productivity, how do we drive competitive advantage?’ and performance management is an enabler to unlocking that,” he said.

Employees also said that they wanted more regular feedback, with 68 per cent saying they would like feedback half-yearly, quarterly or more frequently.

“What our research also said was that employees appreciate the conversation where it’s done right,” explained Woods. “Where it’s rushed, formulaic and it’s in quick messages that haven’t been thought through, that doesn’t work. But where there’s preparation and there’s been thought behind it and intent, it’s really positive.”

The survey showed that most staff find annual appraisals beneficial. Two-thirds (67 per cent) of employees told the professional services firm their appraisal enabled them to better understand their performance and nearly half (48 per cent) said their end-of-year review helped them progress and reflect on their career.

But 37 per cent of staff thought their annual appraisal was a waste of their time.

“I suppose in many organisations it does give you a line in the sand,” Woods said. “It allows you to look back over a period of time, whether that’s a year or a number of months and it’s an opportunity to take stock. I think that is helpful to many individuals.”

Workers also generally feel their performance ratings are justified, with 65 per cent calling their last rating fair and 63 per cent stating they had expected the rating they received.

Last week, Accenture announced it would be scrapping annual reviews in favour of continuous feedback. The management consultancy firm employs more than 300,000 people.

And, earlier this year, professional services firm Deloitte revealed that it would be revamping its appraisal system, calculating that they currently spent two million man hours producing appraisals for their 65,000 staff. Other companies who have dropped formal appraisals include tech giants Microsoft and Adobe.

PwC surveyed 97 UK-headquartered organisations and 1,038 employees. This survey forms part of a bigger report, called ‘Transforming performance management’.