And it’s upon us yet again. Call it what you may – annual performance management, talent review or plain old appraisal season, you cannot escape it. Yet, of all the years gone by, the 2021 annual appraisal cycle promises to be, by far, the most agonizing of them all. Individuals within organizations have begun raising questions as to how they will be evaluated given the churn past year. Mothers, fathers, caregivers had a hard time managing home schooling and work; mental health issues were on the rise, and being successful at work took a backseat for most people. Under these circumstances, how does one define a fair appraisal? Managers are already trembling at the thought of having to justify their decisions. The hesitation to make a decision or penalize anyone in the system is emerging in multiple forms. The biggest question, however, is: can we scrap performance management for 2021?
I reckon many organizations will come up with innovative ideas over the next few weeks. Some may cancel appraisal season and deny every single employee any form of pay increase. Others may give flat bonuses to all. Some may find a way to reward superstars, and some may (gasp!) decide to run it like they do every other year.
Being both an HR professional and an employee impacted by the process, here is my point of view. The primary objective of the annual appraisal, unlike the ongoing performance management process, is to determine future investment in employees. Every organization has a fixed budget. One way to utilize the budget is to split it equally amongst everyone. While the socialists may applaud, the capitalists might cry foul. I can guarantee that if you declared you were going to give out flat increments, you will upset your top performers and everyone who took the effort to shine in 2020. The alternate is to pay for performance; to compensate employees based on their contribution to the organization the past year. On most grounds, this seems fair and is in fact what organizations strived to do in the past.
However, this year, there’s the added complexity of ‘why’ the employee was not able to deliver at gold standard. The organization’s responsibility is to provide necessary support for employees to deliver – be it in terms of workload balancing, mental health support, work equipment, flexible hours. At the end of the day, the fairest option is still to pay for performance. I understand that this may not be a popular opinion, but when you strip the emotions out of the process, it doesn’t seem as monstrous an idea.
The other aspect of the annual cycle, which ideally should be and is decoupled in many organizations, is determining what to do with the bottom performers. Should they be put on a development plan or do we give them the benefit of doubt this year? This is where we should have a real discussion vs debate ratings and pay. This is where the ‘why’ did the employee perform as she did comes in. My recommendation to managers here is to invest effort in understanding the root cause and addressing it. I would lean towards leniency as long as we know that this is attributed to the year that was. And sometimes, placing someone on a development plan is a good way to bring out the best in them, even though it feels like torture.
As we enter the yearly cycle, I hope this helps make your decisions a little easier. It has never been an easy process and never will be. However, when you don the company hat, it is possible to do the right thing by the employee as well as the organization. Know that organizations aren’t evil. They are doing the best they can. Just like you are.
P.S: This was first published here.