Study Shows Companies are Resistant to Change — 65% are Still Using Annual Appraisals

In a recent webinar, Clear Review (www.clearreview.com) conducted a survey based on a pool of 200 UK-based participants. These participants included HR executives, senior managers, CEOs and business directors and were from a wide range of organisations, including Oxford University Press, Vodafone, Perkbox, Next, Visa, HMRC and Odeon Cinemas Group.

The survey covered the performance management systems these organisations had in place — specifically whether they operated under a traditional, annual appraisal system, or whether they were utilising a more continuous, agile approach to performance management.

What did the results show?

Many articles have been written on the topic of annual appraisals and how they are becoming. Evidence has shown they are time-consuming and ineffective, and many global conglomerates have traded in annual appraisals for regular performance discussions. Despite this, the results of the survey revealed that 65% of participants are still using annual appraisals. Of the remaining participants, 24% come from companies who are in the process of moving away from annual appraisals and only 11% had a continuous model of performance management in place.

Why are modern companies so slow to adapt and accept new methods of managing performance?

Why are companies refusing to move with the times and advance? What are their main concerns and what is holding them back? Based on follow-on questions, the Clear Review poll revealed that the following are the biggest reasons holding organisations back from transforming their performance management systems:

82% say they don’t have the right software to facilitate a transition away from annual appraisals, either claiming “we haven’t found the right solution” (53%) or “we have technology but it’s not doing the job” (29%) — This is not surprising given that most performance management software is still based around formal annual reviews or appraisals. Whilst some of these systems have attempted to adapt in order to be more agile, this survey shows that they are not cutting it when it comes to embedding a continuous performance management approach. It’s increasingly clear that in order for a successfully transition to continuous performance management, software that is purpose built for this is required.

60% of participants are concerned that they won’t be able to get managers to have more meaningful conversations with their staff — Continuous performance management is unlikely to succeed unless managers are given appropriate training, guidance and support. They need to be shown the benefits of more frequent conversations and how to conduct them, including how to give and solicit effective feedback and how to keep performance discussions productive.

Nearly a fifth of the participants weren’t sure how they would track the performance conversations — HR needs to know that regular performance discussions are actually taking place, and they need an effective tool to track this. This is the only way of ensuring that employees are receiving the support they need. Software can be used to resolve this problem.

12% state performance-related pay as an issue holding them back from continuous performance management — Many companies carrying out annual reviews use performance ratings to make decisions regarding bonuses and pay increases. Some are worried that agile performance management will pose problems in this regard. Whilst pioneers in continuous performance management have solved these problems successfully, the details of the solutions have not been well publicised and there is a lack of readily available, practical information on this subject.

9% don’t know how to convince senior managers that regular performance discussions are worthwhile — It can be difficult to convince senior members of staff to consider a radical overhaul. Many can become stuck in their ways and keep certain processes in place simply because “this is the way things have always been done”. This reluctance to adapt and advance can cost a company dearly. If senior managers are to be convinced, they need the appropriate facts and figures in front of them to show the business benefits of regular performance discussions.

Clear Review is a continuous performance management software system that has helped companies such as HarperCollins, Aston Villa Football Club and Clydesdale & Yorkshire Banking Group to improve employee performance and encourage meaningful, productive communication between employees and managers. Clear Review prides itself on being the most straightforward, easy-to-use performance management system on the market and was created by a passionate team of, performance management and HR experts.

CEO & Founder

Stuart Hearn is the CEO and founder of Clear Review. He is also an experienced performance management writer, speaker and former HR director with over two decades of experience in HR. In the past, Stuart co-founded PlusHR, a leading HR consulting and outsourcing organisation, and was International HR Director for Sony Music Publishing.

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Press contact: Samantha Lyon (samantha@exposureninja.com)

This release was published on openPR.