Do Performance Appraisals really work?
Do Performance Appraisals really work?
Performance appraisals form a very vital process of any organization in analysing and gauging the annual performance of its employees. The major objective of performance appraisal is to provide feedback on the performance of the employees, reward them for their achievements through increase in salary or promotion and redirect their activities towards organizational goals in case of any deviation. It is generally believed to serve the purpose of bringing positive change in performance of the employees through necessary feedback.
However, in the modern set-up where the organizations have started encouraging participative work environments, goal oriented and employee centric approaches, annual performance appraisals have started losing significance. Many employers now believe that employees are a part of the organisation and not just their possession, who need to be judged at all stages. The numerical rating system is more discouraging than encouraging, as the traditional appraisal process at some point gets subjective. Let us understand how performance appraisals are carried out in traditional setting and how it does not suit the current business trends and working conditions.
Traditional Performance Appraisal Process
The traditional annual performance appraisal process which is still prevalent in many organisations follows a set pattern of:
- setting up performance standards
- Communicating these standards and organisation’s expectations to the employee
- Measuring the actual performance of the employee
- Comparing the actual performance with the set standards
- Providing feedback to the employee and communicating appraisal results
- Taking corrective action in order to make sure any deviations are rectified in the next cycle
The entire process is quite time consuming and tedious. Moreover, managers are often reluctant in discussing the performance and giving feedback to their teams. It is often noted that many a times appraisals are overdue in organisations as managers want to avoid confrontational situations.
Why are performance appraisals not considered that effective?
Apart from the employees, performance appraisals are generally considered by most of the managers as one of the tasks they detest the most. This abhorrence is justifiable as the traditional appraisal process fundamentally seems imperfect. There are a few indicators that suggest why performance appraisals are not so awaited activity of any organisation:
Absence of clarity of goals: The goal-setting process is not very clear to the employees and usually may be done without their individual consent. Hence, they are often not aware of the way they are expected to achieve them due to lack of any proper guidance from the managers with respect to their KRAs/KSAs.
Absence of regular feedback: Though the appraisal is performed annually it is imperative to provide feedback to the employees on a continuous basis at regular intervals. Due to lack of regular feedback employees do not get an idea how deviant they are from their performance standards.
Lack of positive review technique: Lack of practise of positive criticism often evokes a perception that employees are always criticised and given a feedback on their flaws. Employees despise the situations where their faults are pointed out and their achievements are not focused upon.
Mostly unreliable and subjective: There traditional processes of performance appraisal are quite unreliable due to biased and flawed assessments. It is practically not possible to keep a track of all the activities performed by any employee during the year and hence subjective feedbacks are provided by the managers on the basis of their own perceptions.
Very tedious and time-consuming: The task of performance appraisal done through traditional ways is very time-consuming and hence requires a lot of effort by the managers as well as the employees in completing it.
Unsatisfactory and discording: Employees may not be satisfied with the way they have been appraised and hence this may create a discord between the managers and the team. Also, there are instances where employees feel that the appraisal has been biased towards some other team member which may further demotivate them.
Alternative to Annual Performance Appraisals
In this fast paced business environment where we focus more on employee engagement rather than employee segregation, the annual performance appraisals have started losing significance. A research has found that most of the employees consider it unfair and managers feel appraisals reduce productivity instead of increasing it. Hence, there are certain better means which can be deployed to improve employee productivity, which is the sole purpose of any appraisal process.
Setting short-term SMART goals: Setting annual goals and then measuring them is of no use as in such a long time lot of activities lose importance. Hence keeping the goals short term gives a better chance to employees to prove their worth and measure their competence.
Regular performance discussions: It is important for the managers to keep discussing what their expectations are, from their employees and how they need to prioritise their tasks in order to attain better results. Regular discussions give the employees insight into what are the areas they need to focus more.
Real-time feedback: Giving the employees a regular feedback after every task they complete gives way to continuous improvement in their performance. They know where they are going wrong and what is it that they need to improve for the next assignment.
Implementing 360-degree feedback process: A 360-degree feedback process needs to be implemented where a feedback is obtained from different people with whom the employee interacts and then a constructive criticism is communicated to the employee in a positive environment.
Incorporation of a performance management software: It is always better to implement a system where performance is managed through real-time software. It makes the process more reliable and less time consuming.
These changes are not only helpful in making performance management a less tedious job but also a more exciting one. They are more instrumental is shaping an employee’s career path and assisting in progressive learning and development of both the Employees as well as the Managers.