Performance appraisal a tool using which organization assess employees by comparing their performance to the goals that were set at the start of the year.
However performance appraisals rarely meet stated objective. Often performance appraisal is treated as a mere formality. Performance appraisal is a great tool only if used correctly.
Here are a few reason for why the performance appraisal ultimately turn out to be ineffective.
Performance Appraisal is often considered as formality
Performance Appraisal is often termed an exercise that needs to be completed. The reason for completion is just to finish one more pending task. It then just becomes a formality just like many other organization tasks. It renders the whole purpose of Performance Appraisal ineffective.
Improper goals setting
Performance Appraisal to be successful needs clear goal setting.
Let us take a look at this example.
The employee needs to write at least three white papers
The employee needs to learn new technology
While the former is a clear cut goal , the latter is vague. If the goal setting is not precise and measurable then it may lead to ineffective Performance Appraisal
Changes to goals due to any reason are not updated in time
Changes in organization’s business may cause changes to the employee goals as well. For example, if the organization now requires its employee to concentrate on selling new product instead of the old one the goal has changed and thus performance needs to be measured against new goal.
Managers bring personal bias into the appraisal
Managers may often bring in their personal likes and dislikes of subordinates in the performance appraisal thus reducing its effectiveness. Though constructive criticism is acceptable, personal bias may muddle the system and people may not be judged on the goal set.
Organizations that do not have a clear cut plan of action
The important question is “What does organization expect out the performance appraisal system”. If it is just to generate reports, then probably it is not good.Performance appraisal should have common expectation and plan built around it that can be put in action once the process is completed. If the plan is to hike salaries or promote individuals after appraisals, then it needs to be followed to the end.
Not effectively preparing employees and managers
It is the job of Human resource department to make performance appraisal system easy and transparent. Lack of proper training on performance appraisal system often lead to incorrect appraisals.
Complicated performance appraisal systems
An organization has a grade “Above average performer”. It means the employee consistently does his job above the average. Another grade is added “ Exceeds expectation” which is quite similar to the one before.
This may lead to confusion and wasted time. A plethora of grades ranging from 0-10 with no clear cut explanation what 7 or 8 means leaves itself for subjective interpretation.
Managers are not trained to handle outcome of performance exercise
Managers are often not trained to provide feedback sensitively. In a bid to be honest about the performance of expectation, they may cause resentment among employees. The goal of the exercise is to assess and improve performance. If it leads to resentment in team , then the whole purpose is defeated.
Feedback that appear out of no where suddenly at the end of year
The employee gets a shock when during the performance exercise , manager brings up those points that the employee feels are not important. A sudden deluge of feedback at the year end leads employee to think that the management is driven by hidden agenda. Feedbacks needs to happen whole of the year and not only on the performance appraisal day
Do you think performance appraisal is a good tool but is not handled well?