In the first part of this article we discussed a specific methodology for successful performance appraisal. Starting with a solid platform of analysis followed with planning, on-going coaching, and eventually an action phase, the performance appraisal process is now clearly divided. We advise you to read over the first part of this guide if you need to refresh your memory.
What can we use the performance appraisal for?
We use appraisals as inputs for a wide range of decisions within the company, the most obvious being salary increases, promotions and transfers. In addition, we also use them to evaluate recruitment results and, of course, determining training needs and solutions. There are a few experts who also believe that performance appraisal influences employee motivation by identifying and specifying mutually agreed on outcomes. They also feel that using appraisals effectively directs team member attention to specific tasks and objectives and provides feedback on progress towards goals and actual job performance.
I notice that you didn’t mention increasing performance as a benefit of appraisals?
Anecdotally we generally feel that performance appraisal systems lead to improved individual and team performance but the jury is still very much out on this point, in spite of having been very hotly debated. Generally though, there is little evidence to show that performance appraisals lead to increased performance within teams.
What else doesn’t the performance appraisal do very well?
The main issue seems to be that performance appraisals are often used with conflicting goals. On one hand, you have the need for the manager to act as a counsellor and help build up the team member whilst on the other, the manager is required to act as a judge by evaluating the employee’s performance and deciding on rewards. These two roles are inherently incompatible, particularly since the individual and the firm will usually have different goals.
In addition, most work delivered within companies today is a product of teamwork and yet performance appraisals are designed to evaluate the individual alone. This leads to a break between individual performance and delivered team results, potentially damaging long term communal results.
Finally, the performance appraisal system has the potential to be distorted by a number of evaluator biases and more often reflects the unpredictability of the organisational environment than individual performance. It can also reinforce mediocrity by rewarding safe behaviour and discouraging risk taking. Employees can be rewarded for not being creative or challenging the system.
Now that we have a clear view of the performance appraisal process and its applications within your company, is there anything more to say about it? In the last part of this guide we will go into further details to improve your performance appraisal systems.