Making Performance Appraisals Work

There is a growing debate about the appraisal process and the utility of appraisal systems for evaluating employees. The goal of an appraisal is to foster staff development, increase communication between managers and employees, and provide valuable feedback to employees about their performance and recommend strategies for continued professional growth.

But when a manager fails to conduct a fair, constructive, and effective appraisal, it can do more harm than good. Poorly conducted appraisals can seed staff insecurity and encourage dissent or anger. They can also give the appearance of unfair or discriminating treatment.

So if you want to know if appraisals work, the answer is both yes and no. It really depends on how seriously you approach them and how much effort you put into the appraisal process.

Why Performance Appraisals Work

Performance appraisals work when they are designed well, with clear guidelines and goals, administered by trained supervisors, and supported by upper management. Many organizations believe that performance appraisals provide these key benefits for employees and managers:

  • Employees get regular feedback about their performance, and receive suggestions for overcoming weaknesses.
  • Managers and employees work together to set performance goals, identify training and development needs, and discuss career opportunities that often result in salary increases.
  • Managers gain insight into different jobs, which fosters better working relationships and strengthens their management skills.
  • Managers and employees communicate regularly and develop open, give-and-take relationships.

Why Performance Appraisals Don’t Work

Performance appraisals won’t work unless upper management takes interest. Senior management needs to be closely aligned with HR executives on company goals, employee evaluation methods, and the importance of performance appraisals. A company needs to view its appraisal system as a core component of the business.

Another reason that appraisals can fail is because managers don’t know how to assess employees, and don’t receive adequate training on how to carry out a productive review. An untrained evaluator may:

  • Have difficulty gauging work that doesn’t produce measurable results.
  • Give glowing appraisals based on one outstanding employee skill rather than on total performance (the halo effect).
  • Tend to stick to safer middle-ground evaluations, rather than using the full range of a performance rating scale.
  • Rate behavior rather than work performance. An employee who’s pleasant and always looks busy may cloud an appraiser’s perception.
  • Show bias toward employees who exhibit characteristics similar to their own.
  • Have difficulty accurately assessing the behavior of individuals, by applying uniform standards of judgment.

In the end, managers and employees must realize that there is no perfect appraisal system. All appraisals have shortcomings that must be addressed, but when they work, they are effective tools for correcting performance problems and increasing productivity.