Performance Appraisals Must Go

Writen by Rick Dacri

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.

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.

Rick Dacri is an organizational development consultant, coach and featured speaker at regional and national conferences. Since 1995 his firm, Dacri & Associates has focused on improving the performance of individuals and organizations. Rick can be reached at 1-800-892-9828, rick@dacri.com, or http://www.dacri.com.

2 comments:

Excellent points, Rick. You're absolutely right. As several experts have said, merit pay isn't enough to encourage performance, but is enough to annoy people. More importantly, there most certainly are better ways to develop, encourage and recognize people.

While we at Globoforce see the value of annual performance reviews and use them ourselves, we also practice what we preach with the use of ongoing, frequent and timely recognition as the most effective means of performance management.

When deployed according to best practice so the strategic employee recognition program is available as a peer-to-peer option as well as manager-to-employee, recognition becomes a positive and ongoing form of 360 degree performance assessments in which anyone in the organization can comment on the contributions and effectiveness of their teammates. These “recognition assessments” and kudos can then be used during the annual performance review as an additional data point on the strengths (John has been recognized repeatedly for innovation) and even weaknesses (but John has been recognized only once for teamwork) as potential areas of improvement.

This presents a much more rounded view of an employee's contributions that managers may not even be directly aware of.

I blog extensively on this topic of the roll of strategic recognition in performance management here: http://globoforce.blogspot.com/search/label/performance%20management

January 26, 2009 at 9:05 AM  

Hi

I read this post 2 times. It is very useful.

Pls try to keep posting.

Let me show other source that may be good for community.

Source: Free performance appraisal ebooks

Best regards
Jonathan.

March 2, 2011 at 1:00 AM  

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