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    The Impact of COVID-19 on Performance Appraisals

    April 9, 2020

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    performance appraisals during covid

    Be it implementing work-from-home policies, introducing a sweep of new HR workflows or rolling out COVID communications on the fly - organisations around the globe are having to make courageous business decisions everyday, without losing a moment’s time. And they’re all in a conundrum on how to balance the interest of their employees’ safety & wellbeing, while putting pressure on productivity and maintaining a strong balance sheet.

    These are challenging times for everyone, and almost every business, every industry has been infected by the virus, and taken the hit of the outbreak. With global recession indicators glaring at the world of work, and the timing unfortunately coinciding with performance appraisals for most, businesses will have to rebalance and reevaluate their compensation and benefit decisions in the wake of the crisis.

    The first priority for talent leaders across the globe will be to manage costs.

    From pay cuts to lay offs, suspending high-cost initiatives to stalling new hires, to putting all bonuses, variable pays and increments on hold - organisations are having to find ways to cut back on expenditures and make decisions whose impact will be harsh and far-ranging.

    But it will also be critical to retain the high performers and ensure stability and job security.

    So how can business leaders strike a balance? In the interest of business continuity and to be able to hold on to one’s high-performing team, even when one can see the imminent economic downturn, one needs to weigh one’s balance sheet against employee expectations, and find a middle ground that is fair to both.

    Businesses will need to run a tight ship over these choppy waters.

    And that includes ring fencing the top talent. And safeguarding all those who are journeying with them. We’re living through a time of uncertainty and angst that we’ve never experienced before. So no one has the right answer. But there are multiple possibilities being explored by companies on how to tackle the performance appraisals - some are thinking of the traditional bonus payouts, while some are planning for muted salary revisions or delays in paying variables by at least a quarter, so they have more time to regroup and respond to the economic situation.

    performance-appraisals-during-covidBut they should go after transparency rather than a wait-and-watch approach.

    Employees always appreciate honesty and transparency over power distance and delayed responses in the name of safeguarding one’s business and avoiding any panic situations. Most businesses who have rolled out contingency plans, or even declared pay cuts/complete washouts are doing a lot better than those who are still keeping their workforce in the dark. Because everyone knows what to expect in the times to come.

    Remember, people first, economics next.

    Retaining talent has always been of utmost importance. And it’s no different during a crisis. While business leaders will have to make tough people decisions today - let some go, cut a few benefits, reimagine cost structures and so on, to stay afloat - retaining people would still be key. Because it’s the people who will ensure business continuity, drive new initiatives, motivate each other, innovate on fresh business strategies and identify opportunities during the crisis.

    Businesses need to stay logical, but compassionate.

    Transparency in communications and tabling all the facts clearly but compassionately is what businesses owe to their employees at this point. In order for them to make their own contingency plans and know what is coming their way. Everyone is mature and watching the crisis unfold before their eyes. So there is enough awareness of the economic implications it is likely to bring in its wake. So it is important for businesses to communicate honestly and call a spade a spade, so that the average performers can get a heads-up of impending layoffs and the top performers can be assured that when the economic climate turns, they will be given their dues.


    Innovation is going to be the real saviour.

    Businesses will need to Innovate.
    The unprecedented situation we all find ourselves in is more than ever demanding organisations to be innovative and agile. While every aspect of the business is demanding a relook at conventional practices and the same goes for performance appraisal methods. More than ever organisations need to think out of the box and introduce innovative performance processes and initiatives.

    To help your organisation in redesigning your performance appraisal methods here is a collection of some of the best talent management practices from unicorns of the world like Google, Cisco, Ola, Paytm, Inmobi, Intuit - organisations with innovation as inbuilt DNA.

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