Ditching our old performance appraisal process gave employees ownership and added value to the business
The traditional performance appraisal process at UK retailer River Island was failing to add value back in 2014/2015. So the organisation started a journey to move to a more progressive and effective process based on more frequent 1:1s and employee ownership
The journey started as a result of picking up on a level of noise within the organisation which reflected dissatisfaction with the existing process. People felt that it was a waste of time and that it didn’t add value. Set timescales meant that the appraisal window always fell in the same month of the year (for no good reason). In addition, the appraisal process didn’t link to anything and had become a tick box activity that was being ‘policed’ by HR. Where appraisal forms were being completed it was being done manually and then a hard copy of the form being passed back for filing. In most cases, the forms then languished in personnel files until someone decided that they had a performance issue that they wanted to address and hoped to use the appraisal form as a lever to this. Of course even in those cases the content on the form would typically say that the performance of the individual was good and no cause for concern. The process was not supporting career development, it was not linked to pay and it was not being used to manage performance.
After picking up on the noise it was time to look at the facts and search for any value add from the process. The data we had told us that in 2014 only 7% of appraisal forms were returned in the head office environment. Retail fared a little better but still less than 50% of forms were being returned and logged. We struggled to see any tangible value that was being added to the business via this process and in fact we could identify tangible benefits in hours saved from ditching it.
The external environment
In addition to looking within the business and identifying an ineffective process we then linked this with a trend that was emerging in the external landscape. At the time, we were seeing more and more stories about businesses who had moved away from the traditional appraisal process and had experienced success from doing so. This research helped shape our thinking and support the business case for change.
After putting together the business case for change and discussing the proposal with the senior executive the decision was taken to go ahead and reinvent our process. The new process was formed around the concept of more frequent 1:1 conversations between managers and employees and employees taking ownership for arranging ‘Career Development Meetings’ at a time that felt right for them. There were some key underlying principles that formed the foundation of our new way of working.
- Employee personal development should be ‘employee led’
As an individual you are the main stakeholder when it comes to your own development. No-one can own it and influence it better than yourself. Therefore, as an employer we wanted to enable employees to take ownership of their own development at the same time as ensuring we had a framework in place to support them with this. In our process, employees are responsible for saying when they want to have a career conversation (hint, it doesn’t always have to be in March) and they are the ones that maintain their own real time career development plan too.
- Focus on the quality of 1:1 conversations between managers and their employees
The new process is linked to promoting more real time ‘in the moment’ feedback and quality conversations. When you talk about what’s going well and what needs to be improved on all of the time you see more direct results in terms of productivity and performance. These conversations then enable individuals to talk about next steps and promotion opportunities in a more relaxed way which suits our business and means that individuals can progress quickly when the right opportunity arises.
- Conversations should be forward focused
This enabled us to talk more progressively about aspirations and skills development as opposed to the weight of a conversation being on past performance. Again the frequency of 1:1s takes away the requirement for spending too much time reflecting on what has happened in the past as, if done properly, you would have addressed past performance in the moment when it happened. Now we can concentrate on the future and enabling individuals to achieve their future potential.
Things to consider
To support the launch of our new process we initially put in place a pretty quick fix training solution through which we ran sessions for both employees and line managers and covered the fundamentals of the new process. This enabled us to launch quickly and achieve a degree of success from this. At this stage the key things that we wanted managers to think about were as follows.
At any time it is important to make sure that employees who are working for you are aware of three things and as their manager you are responsible for this.
- Employees should be aware of what they are personally accountable for and what you expect from them.
- They should be aware of the objectives and goals for the team or department within which they work.
- They should be aware of the purpose, targets or goals of the organisation.
This helps give the context for how employees do their job and the standards of performance required.
Then, as our process became more established and we obtained feedback from seeing it in action, we repositioned again and developed a more comprehensive management skills programme to support it.
We aimed to ensure that our managers had the skills to communicate the above points effectively within their teams and that they could also act as a coach to their employees and a talent scout able to spot high performers.
Our latest engagement metrics show that we are up 6% on the perception of management in the business, up 3% on leadership and up 1% on personal growth. Our overall engagement is up 2% to sit at 81%.
In the key measures relating to ‘My Manager’ we have seen a great initial upward shift in perceptions. In particular our measure relating to a manager giving positive feedback to help employees improve performance and their career uplifted by 9% as a result of the change and the supporting L&D programme. There was also a 6% uplift on the measure linked to ‘my manager makes time for me and supports me to do my job well.’
It does still feel like early days and we are learning all of the time. We continue to shape our activity and process based on the three factors that originally influenced us: the internal noise, the facts and the external landscape.
It’s safe to say that we haven’t missed the old style appraisal format. Our new process works for us and people are happy to embrace it.