Head of HR scrapped the MUS (annual appraisal): It was all about rating
If you want to develop your employees and the organisation, you need to take a completely different approach than annual appraisals, finds Merkur Cooperative Bank.
An end to the MUS
At Merkur Cooperative Bank, she has helped transform the way appraisals are held (known in Danish as the annual ‘medarbejderudviklingssamtale’ or ‘MUS’ for short). At Merkur, they renamed it SUS, which is short for ‘strategisk udviklingssamtale’ (strategic development review).
Two years ago, the bank abandoned the MUS and switched to feedback dialogues. This happened partly because the MUS was found to be non-developmental, as it was mostly held only once a year, and partly because it focused far too much on the rating given to employees.
“With the prospect of having only one formal annual appraisal at which you’d be evaluated on a point scale, it seemed so negative to us, and instead of looking forward to the dialogue, employees dreaded their rating.” What I saw was employees dwelling on the rating and wondering if it would be, say, 2.9 or 3.1. It just wasn’t good for their development,” explains Katrine Norup.
Although we’ve been running this new type of appraisals for two years, we’re ‘still practicing”, she adds, but what they have learned is clear: no rating; but real development reviews held every three months and based on feedback. The return is better for both employees and managers compared to the MUS, which was once a year.
“The reviews we’re now conducting provide not only feedback but focus on various aspects in the past year, for example well-being, behaviour or the development plan. The idea is to provide feedback on current issues, which isn’t the case with the MUS, while also focusing on the aspects that are also covered by the MUS. The feedback dialogues promote psychological safety and strengthens the employee-manager relationship. The act of giving feedback, whether from employees or managers, is to help us communicate more openly throughout the organisation,” explains Katrine Norup.
From MUS to feedback – Katrine Norup offers five good tips
- Quarterly feedback reviews put a greater and continuous focus on learning and development compared to the annual MUS in which the focus is on rating and no one really remembers what is said, especially if no one has followed up since the last MUS.
- Feedback dialogues strengthen the manager-employee relationship, because the goal is not to rate the employee but to have a pleasant conversation about how development is going.
- Especially younger employees ask for continuous feedback. If they feel they are not getting what they need, they will find work elsewhere. Companies that prioritise feedback will be better positioned to attract this group.
- Feedback dialogues only work in companies that already have an open and trust-based culture. So, before moving from the MUS to feedback dialogues, this must be secured.
- A good feedback culture takes hard work. Good feedback takes practice. It is therefore important that the organisation has the tools to provide constructive feedback. This applies to feedback from managers, but also to mutual feedback between colleagues.
How motivated am I?
There is still a rating element to the discussions as the employees are asked to rate their motivation on a scale from 0-10. According to Katrine Norup, it is about having something to base the conversations on. Your motivation is often linked to your private life – in good times as well as bad times, and this is not necessarily taken into account in the MUS.
In this way, the manager becomes more alert to any other factors that might affect the individual at work, and the motivation rating is included in the summary of an ongoing document maintained by the employee. It allows the manager and the employee to always track what they discussed at previous reviews.
New approach will gain ground, but probably won’t fit all
While the initiative to effect change has done good for her and Merkur Cooperative Bank, Katrine is not sure it can be applied to everyone. It places high demands on the culture already present in the company, and if the culture needs to change in the process, the transition could be difficult.
She is convinced, though, that the winds are changing, moving away from ‘the old way’ and the rating benchmark, as especially younger colleagues seek feedback and generally want to discuss their development more frequently than once a year.
“The need to be attractive workplaces in order to retain young people is a point in itself; they won’t be satisfied with just an annual MUS. They want frequent feedback and recognition, and if they don't get it, they will have moved on. They are less loyal, and unlike their older generations with their ‘no news is good news’ mindset, they genuinely want ongoing dialogue about their development,” states Katrine Norup.