Continuous conversations or annual appraisals?

Continuous conversations are a more fluid, in-the-moment approach to handling performance reviews where feedback takes place throughout the year on an ongoing basis.

Continuous conversations allow managers and employees to provide real-time, up-to-date feedback. Managers can offer observations from recent interactions or meetings, and employees have the opportunity to seek guidance on current and upcoming projects.

What are the key differences between traditional appraisal systems and continuous conversations?

1. Traditional performance management is based on an annual appraisal. Managers are expected to use this time to evaluate:

• an employee’s skills
• achievements
• weaknesses
• whether or not they have met their targets over the last year
• long-term career aspirations
• what their targets should be for next year
• what their personal development plan should look like.

Fitting all of this into one meeting can be challenging and so it often becomes a tick box exercise.

2. Continuous conversations mean that all of the items listed above can be discussed on a more frequent basis. This can feel more natural for both the manager and the employee, who both, in turn, benefit from developing a healthier, more authentic workplace relationship.

3. The annual appraisal system often represents a process where goals and targets become quickly outdated by the time the next appraisal is due (and you’ve managed to agree an hour out of both of your busy schedules). The conversations taking place in these meetings are less effective because so much time has passed between the event and the feedback given.

4. Adopting continuous conversations means employees can work towards nearer-term goals relevant to the ever-growing needs of the business.

Why is continuous performance management important?

The annual performance review can be a source of stress for employees and managers alike. For managers, having to relay possible negative feedback, to develop, to guide pay and to document performance can make the appraisal feel like a daunting task. While employees dread being evaluated on their performance for a years’ worth of work in a single conversation.

Some statistics to think about:

• According to analytics and advisory company Gallup, employees that receive weekly feedback rather than annual appraisals are 2.7 times more likely to be engaged at work.
• Adobe found that there was a high percentage of employees handing in their notice following annual appraisals. After moving away from the traditional performance management system, they saw a 30% drop in voluntary turnover.
• Forbes research found that companies who manage objectives quarterly generate 30% higher returns than companies who manage them annually.
• CIPD reported that almost three quarters of senior leaders from outside HR considered annual appraisals ineffective, and 55% of senior HR leaders did not consider them effective.

What are the potential drawbacks?

Managers might be resistant to conducting continuous conversations as it means they need to have more meaningful conversations with their team members. Concerns about what to discuss during these conversations or how to start them could be off-putting for managers. However, with the appropriate training and guidance, managers should be able to conduct one to ones effectively. One-to-one meeting templates can also be used to help structure conversations to ensure productive coaching and feedback sessions.

Employees may also be reluctant to the change from traditional appraisals to continuous conversations. As with all change, people react in different ways, but panic and worry are usually the top contenders. To overcome this, we recommend communicating with staff about the change as early on as possible. Make them aware of why you are making the change and the goal you want to achieve. Emphasise the benefits. Provide practical information and listen to their feedback. Transparency with your employees will make them feel valued, give them time to process and ultimately encourage them to get onboard with the change.

How to implement continuous conversations

• get management team on board, make employees aware of continuous conversations, why it’s being introduced, benefits, impacts etc.
• provide training for managers on how to conduct continuous conversations
• create a goal-setting process – near-term targets aligned with business goals
• incorporate a career/personal development agenda for regular discussion meetings
• conduct reviews of new system.

Contact our HR Consultants today

If you need specific advice or would like further information, please get in touch with our specialist team by filling out our online enquiry form or by calling 0333 222 0989.