Performance Appraisals: Outdated and Antiquated?

Performance Appraisals: Outdated and Antiquated?

Contributed by Steve Freeman, Director, Human Resources Consulting

Who really likes performance appraisals? Go ahead, please raise your hand if you like preparing, writing, giving, or receiving them.

If you raised your hand, you are very unique indeed!

For this reason, there will always be critics ready to abolish the annual performance review or appraisal. These pundits will exclaim:

  • “they serve no purpose”
  • “performance reviews are de-motivating”
  • “performance appraisals detract from a productive work environment”
  • “any employees who aren’t working out should just be fired; there is no need to go through a process of performance feedback”
  • “performance appraisals disrupt relationships between employees and supervisors as well as co-workers”
  • “reviews don’t matter because everyone gets the same pay increase anyway”
  • “reviews only make sense for new employees”

The fact is, however, that you will get out of a performance management process what you put into it. Pulling a generic form off the shelf and checking a few boxes rarely provides any value whatsoever.

A meaningful and impactful performance management process (inclusive of a customized performance appraisal form) is a critical part of employee productivity. While it varies by industry, company, and culture, the appraisal should capture goals and expectations, achievements, variances, identification and assignment of development activities, and career path desires. Can this all be done without a performance appraisal form? Absolutely! Is it? Almost never!

If your reviews are not creating value, driving goal alignment, improving employee productivity and accountability, and increasing your bottom line, then stopping doing them. Get rid of them or change them to be the value-added system needed to drive business success.

Here are a few suggestions for making performance appraisals truly valuable:

  • Develop goals tied to the organization’s annual plan. All department and individual goals should play a part in achieving the annual plan.
  • Most organizations raise the bar each year because better performance is expected from clients, shareholders, and other stakeholders. You should also expect that each employee should be able to attain more each year as experience, knowledge, and business acumen grows.
  • Engage employees in developing and assessing goals and achievements. Buy-in is critical for a high performance culture. You might be amazed by the hurdles jumped when employees own their goals and achievements.
  • Results are a combination of WHAT is done and HOW it’s done. Measure and assess both in order to develop a culture that reflects the organization’s values.
  • Goals that are SMART (Specific, Measurable, Attainable, Realistic, and Time-bound) are clear and understood. Results can then be easily evaluated.
  • Do you want to include employee development goals and actions as part of your performance management system? It’s a great conversation to have that shows your interest in each employee’s career while also planning motivational development actions for the coming year.
  • Realize that a performance appraisal is an annual activity, but a performance management process is continuous. The performance appraisal is NOT a suitable replacement for regular on-going feedback. There should be absolutely no surprises on the appraisal itself.
  • Set goals and expectations regardless of the size of your merit budget.
  • Celebrate goal achievement by individuals, departments, and the entire organization!

If business success is “outdated and antiquated,” then scrap plans for performance management.