Problems of performance appraisal

1. Problems of performance appraisal
Destroy Your Performance Appraisals. That's right, destroy them. Your employees
don't want them. Your managers hate to give them. And frankly, it is rare that they are
written honestly anyway.
So why do them? Why do employers continue to inflict so much pain on themselves
and their workforce? What are they trying to accomplish?
Employers often think they should do them in order to foster a workplace where
employees are held accountable; where good performance is rewarded; and where
employees are paid fairly. If these are the goals of performance appraisal, then why
does study after study report that no one is happy with this system of evaluating
performance? Why is there always tension in the air and acid in the stomach when it
is performance appraisal time?
Let's look at a few of the reasons appraisals exist and see if there may be a better way
to achieve these admirable goals.
1. Appraisals correct bad performance--Using an annual or semi-annual meeting with
your employee to correct problems that occur during the year is ineffective and unfair.
Appraisals cannot correct past problems. If the behavior was done in the past, it
cannot be changed because you cannot change what has already occurred. Problems
must be addressed as they occur. Waiting for appraisal time to correct the problem is
the equivalent to threatening a child with "wait until your father gets home!"
Appraisals shouldn't be a "gotcha" time. If you want to correct bad performance or
behavior, then address it immediately either through coaching, counseling or
discipline, but not through an appraisal.
2. Appraisals are used for wage increases--This is a problem for many reasons. First,
money clouds the open dialogue between a manager and an employee. While
managers are focusing on performance, employees are focusing on how much money
this is going to mean in their pocket. Recognizing this as a problem, companies often
separate the issues into two discussions held at different times. But this rarely works.
Money and not performance remains the overriding issue.
Secondly, using appraisals as a way of differentiating between good and bad
performance might have worked when merit budgets were 10% and 12%, but those
days are long gone. With merit budgets often averaging 3%, does a 1%, 2%, or even a
3% differential between good and bad performers adequately send a message that
recognizes and rewards good performance?
And finally, supervisors are often forced to be dishonest on the appraisals in order to
ensure that the employee gets something or to avoid the inevitable confrontation
associated with telling an employee that they merited no increase. There are better
ways to recognize and reward employees.

2. 3. Appraisals are tools to develop employees--Frankly, when done properly,
appraisals can be a good development tool. However, with all the baggage associated
with appraisals, there are better ways to develop your people. If employers focus on
an employee and discuss his or her strengths, areas needing development, skills and
skill gaps, and what is needed for career success and organizational growth, then a
positive plan can be developed where both the employee and the employer comes out
as winners. A discussion that begins with "Let's talk about how we can put together a
plan focused on growing you in the organization" will be reviewed more positively
than "Let's talk about your performance."
So does this mean we should not do any type of appraisal? No. Ongoing, continuous
discussions with your employees are critical to their success and the success of the
organization. But the process must be continuous--daily, weekly, and nor just an
annual event. It should focus on improving future performance. It must be honest and
sincere. It must be developmental with a focus on growing the employee. It can
include a discussion about goals and objectives. And yes, if you must, things can be
written down. You will find that with this type of forward thinking focus, there will
be less pain and less acid in the stomach.
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