The Importance Of Performance Appraisal Cycle

All of us have been a part of performance appraisal cycle. What does performance appraisal mean to your company? For most of the companies, it is a practice that happens once or twice a year where managers evaluate and score their team members according to predefined grading method or scale on different Key Responsibility Areas (KRAs). They hold a meeting with their team members and provide the feedback for the whole year or six months. The formal top-down annual review process is focused on the past performance to determine an employee’s performance. 95% of managers are not satisfied with their organization’s annual performance process and 75% of employees see it as unfair. Another study has found that only 8% of companies believe that their traditional performance management process drives business value.

Some of the problems that arise with this traditional approach are

Frequency of the Review

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How much traditional performance methods help in employee development is somewhat unclear for employees as well as organizations. Performance appraisal is about the past, which means how the employee has performed in past period that is being reviewed for a particular performance cycle. They rarely focus on developing the employee’s skills and abilities.

The traditional approach to performance appraisals needs a change and some companies like Adobe have enhanced traditional approach, modifying certain elements and making it more suited for the current workforce. These elements along with some other have given rise to continuous performance management, that is being adopted more and more organizations worldwide. So what does Continuous Performance management mean and how is it different from the traditional approach?

As the name says, Continuous performance management is the process that takes place throughout the year on an ongoing basis. These processes include near-term objective setting, regular one-to-one, frequent coaching and