Annual appraisal: how to make the most out of it

Whether you meet with your direct reports or you meet with your supervisor, annual appraisal meetings will have a lasting impact in particular on the direct report’s motivation and future performance.

How do you make sure that the impact is constructive, drives intrinsic motivation and leads to a better cooperation that before?

-reading time: 5 minutes- / –full checklist downloads below

Annual appraisal meetings: how to make the most out of it

Whether you meet with your direct reports or you meet with your supervisor, annual appraisal meetings will have a lasting impact, in particular on the direct report’s motivation and future performance.

As a manager and a direct report, how do you make sure that the impact is constructive, drives intrinsic motivation and leads to a better cooperation and performance than before?

The right setting – the manager’s first responsibility

Make sure that there is time and attention from both sides. From my experience, quite a number of managers consider the annual appraisal meeting a tick-the-box exercise, which is perceived as time consuming and is used as a meeting only to determine the bonus for the previous year.

As a manager, you should approach the annual appraisal with your direct reports as if you would meet your top clients. Your top clients appreciate it very much when you dedicate time, come well-prepared, listen to their needs and make sure that they feel comfortable to tell you their views, in order to strengthen the relationship and to grow the business of your clients; when they grow, you grow!

The same approach is valid for how you approach your direct reports:

  • Dedicate time and make your direct reports feel appreciated – even when you are not satisfied with their performance
  • Prepare yourself by reading into the targets that were set, listing the possible external opportunities and threats with respect to reaching these targets
  • Review your own performance and the impact your direct reports, in terms of your own priorities and your behaviour
  • Create a positive and constructive atmosphere, which supports the psychological safety of your direct reports, so that you both can be open to each other without fear
  • Make sure nobody disturbs your meeting and avoid any distraction
The right preparation: the direct report’s first responsibility

As a direct report to your manager, imagine that you are a top client and that you want be valued for what you bring to the company. Imagine what you would need to be satisfied and how you could grow – in line with the company goals and your potential.

This does not mean that you can demand whatever you feel like you deserve; you would not expect this from your clients, would you? Unless your clients are in it for the long run, are well prepared and have documented their added value to your business, such as turnover, volumes, prices, share of wallet, order quantities, and so on.

Therefore:

  • Prepare yourself by relating your performance to what is expected (your targets)
  • Make a detailed, but structured list of what it took you to achieve the targets
  • Make a list of valid arguments why you have not reached certain goals
  • Quantify as much as possible what value you have added to the team and business
  • Identify the impact of your achievements on your colleagues and your supervisor
  • Understand for yourself what your big picture is, concerning what you would like to achieve in the next years
  • Identify what you would need to perform
  • Set the accompanying personal goals that support your big picture and what you would need to achieve this
  • Compare your achievements of the past years with your future big picture, and base your promotion, salary and secondary benefits increase on this
  • Whatever you ask for, be reasonable, come forward with valid arguments and go for the right balance between what you deliver and what you would like to receive in return
Managers: make it meaningful and be mindful

Around 15 years ago, my former employer initiated a company-wide annual appraisal program, supported by a horrible Lotus Notes application. Back then, people management was not one of the cultural strengths of the company and the way HR initiated the appraisal program did not evoke high commitment of supervisors. Indeed, a tick-the-box exercise to make sure that you would not receive reminder emails, which were bcc-ed to the supervisor’s supervisor (personally, I think bcc should be banned from emails anyway). Managers came into the meeting (usually after a couple of postponements) unprepared, said that they would only have 15-20 minutes (including walking back and forth to the coffee machine) to go through the targets, sort of listened and at the end I received an envelop with an inflation correction and the request to complete the Lotus Notes application and think of a few targets for the coming year.

Obviously, it was not motivating at all. Especially when I learned that co-workers were apparently struggling with a higher inflation–which was a bit awkward, as I thought that inflation was always set a country level.

Fortunately, things have changed. And I never (hopefully) have used that lousy approach to my direct reports.

So, I have always taken pride in taking enough time for appraisal meetings with my teams. Perhaps it is my commercial background to treat my direct reports as my top clients and hold the view that I work for the team instead of the other way around, or my human interest to understand the motivation of people, whether it being intrinsic (coming from the person self) or extrinsic (rewards).

Close to a decade a go, I had my first director role and I wanted to do it right. I took my responsibility and prepared myself well. To understand what happened the year before, to put the performance into perspective and the right context, and also to understand my impact on the performance of my direct reports, I asked 6 questions – before even looking at the targets and achievements:

Question 1:

What did you do well?

Question 2:

What could you have done better?

Question 3:

What did I do well to support you?

Question 4:

What could I have done better to support you?

Question 5:

What should I continue to do to support you?

Question 6:

What else can I do to support you?

Bonus question: Why?

Make sure you understand the underlying motivation by following up with why?

Make the annual appraisal meaningful and be mindful. There are always reasons for poor performance that you are not aware of and that have nothing to do with the skills or competencies of your direct reports. Set the stage by asking these questions and asking why when needed. Treat the answers of your direct reports with openness and fairness.

And then proceed in a well-documented and formal fashion with the targets and achievements for the past year.

Direct reports: be aware of what you are asking for

Some of my clients that ask me for career coaching, address the point that they do not feel that they get what they deserve in terms of financial rewards, secondary benefits or promotions. Arguments that are raised are mostly related to what is achieved (and less to what is expected), related to what colleagues earn or questioning why co-workers received a promotion.

A wise HR director gave me once a very important tip:

Never ever compare your package to the package of others; you do not know what the reasons are why the packages are different. Perhaps there are very valid reasons. Perhaps not. Perhaps it is not even your manager who decides about the compensation packages. But you will get frustrated and fixated on the other, instead of your own performance.

Assuming you go into the annual appraisal meeting well-prepared, you should ask yourself the following questions:

Question 1:

What is really important to me and what satisfies me? (money, learning, status, comfort)

Question 2:

Have I done everything to support my wishes? (performance, consistency, impact on others, no flaws)

Question 3:

Do I have the capabilities? (skills, competencies, time, energy)

Question 4:

Do I have the motivation? (intrinsic, attitude, willpower, ambition)

Question 5:

Am I prepared for the consequences of a promotion? (More responsibility, traveling, spending more time at work, moving abroad, more stress)

Question 6:

Is the balance between achievements, commitments, dedication and rewards right?

Managers & direct reports: it is all about understanding each other

Annual appraisal meetings should be a dialogue with the aim to understand each other’s context, drivers and motivation. Be aware that both managers and direct reports do not know everything from each other.

The (adapted) JoHari Window may help both managers and direct reports to come to the same understanding:

JoHari Window STRATZR

Arena: Drivers, reasons, shortcomings, and achievements that both the manager and direct reports know. These are drivers, reasons, shortcomings, and achievements that both the manager and direct reports perceive.

Hidden, or Facade: Drivers, reasons, shortcomings, and achievements selected by the direct report, but not by the manager, go in this quadrant. These are things both are either unaware of, or that are untrue but for the direct report’s claim.

Blind spot: Drivers, reasons, shortcomings, and achievements not selected by direct reports, but only by their manager go here. These represent what the manager perceives but the direct report does not.

Unknown: Drivers, reasons, shortcomings, and achievements that neither direct reports nor managers are aware of go here. They represent direct reports’s behaviors or motives that no one participating recognizes—either because they do not apply or because of collective ignorance of these drivers, reasons, shortcomings, and achievements.

Checklist:
  • Dedicate time
  • Avoid disturbance
  • Be prepared
  • Document what is relevant
  • Create a positive, safe and constructive environment
  • Be trustworthy
  • Ask questions to each other
  • Listen to each other
  • Understand each other
  • Find the balance between reward and performance that is right for the direct report, manager and company
  • Enjoy!