Should Performance Appraisals Be Eliminated
The topic of performance appraisal has been lately put under significant scrutiny within the corporate environment. As the requirements and the demands of clients change, businesses are forced to adapt and make improvements following such changes. Consequently, the environment in the workplace also changes, calling for more efficiency in performing assigned tasks. Performance appraisal interviews have been criticised for being ineffective in evaluating the actual accomplishments of employees.
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Furthermore, performance appraisals are conducted once or twice a year while employees that want to achieve something in a company need feedback on a weekly basis (Bersin, 2013). Many successful companies like Microsoft are currently trying to overcome the burden of performance appraisals and focus on in-time feedback for employees, as mentioned by Kaine and Johns (2015). Appraisal interviews can be particularly stressful for workers when the results depend on the pay rises and bonuses for excellent performance. Adding together all of the points mentioned above and the hard costs of performance management (Buckingham & Goodall, 2015), and the image of performance appraisal interviews is not as pristine as it could have been.
Therefore, to answer the question of whether the days of performance appraisal should be numbered, it is important to account for its pros and cons. As for the pros, the aim of performance appraisals is assessing employees’ effectiveness as well as setting goals for the future (Sandlund, Olin-Scheller, Nyroos, & Nahnfeldt, 2011), which cannot be considered an unimportant task. Another advantage is directly associated with managers’ inability to spend more time with employees and engage into a conversation with them.
Performance appraisals offer managers an opportunity to have one-on-ones with workers, giving a better understanding of who feels great working in the company. Moreover, appraisals allow managers to give a formal positive feedback to those employees who feel confident in their abilities and want to identify their future areas for improvement. Lastly, interviews about employees’ performance identify opportunities, which may be discovered in the course of the appraisal. As a result of this, the manager can assign and reassign projects in agreement with the interests of workers. Overall, if done correctly, performance appraisals can motivate, direct, and positively impact the performance of separate individuals or a company as a whole.
The cons of performance appraisals interviews overweigh the advantages. As discussed in multiple articles, especially the authoritative resources such as Forbes and Harvard Business Review, the majority of performance appraisals do much more damage than good. Among the damages is the wasting of time on the lower end of the spectrum and the alienation of employees on the other end, which is the most troublesome (Lawler, 2014).
Many can agree that the process of performance management itself is uncomfortable for both workers and managers. A manager can often be uncomfortable in his or her ‘judgement seat’, having to provide constructive criticism and make sure that the interviewee does not respond with a defensive remark (Heathfield, 2016). Therefore, there is an immense amount of pressure put on the manager, who should not only conduct an objective performance appraisal but also identify the consequences of the interview. Otherwise, if there are no clear results of the evaluation, it can be considered a complete waste of time, funds, and effort (Daoanis, 2012).
Having advantages and disadvantages, performance appraisal interviews have been said to influence employees both negatively and positively. For example, worker’s loyalty and efficiency can be significantly increased after a performance appraisal. On the other hand, some employees do not experience positive outcomes and are unwilling to dedicate more of their extra time to completing an assignment if they are not financially rewarded for it. This means that the majority of workers in a company put their interests first, and are only willing to dedicate extra effort if their payment increases.
It can be concluded that the majority of performance appraisals require much more effort on the part of the manager and the employee compared to the value they offer. As seen from the role-playing exercises that were targeted to find out the benefits of performance appraisals, employees are usually forced to take a defensive position and make sure that the manager agrees with them.
Managers may also be put under great pressure since they usually do not spend much time interacting with employees on a daily basis, but at the performance appraisal, they should act like they know everything about the relationships within the company as well as the effectiveness of employees in completing their assignments. Therefore, the days of yearly performance appraisals are long gone, and managers should start paying more attention to giving workers feedback in real time. Such a strategy will be more effective since there will be a chance to fix mistakes, regroup, set new objectives, and act upon them. There is no point for an employee to wait a year to get feedback from the manager when there is an option to go to his or her office and ask straightforward questions.
Recommendations to Managers
The process of performance management is one of the weakest points for the vast majority of companies. Comprised of employee development and performance appraisal, performance management is often called the “Achille’s heel of human resource management” (Pulakos, 2004, p. 1). Moreover, as discussed previously, there is only a small portion of employees in a company who think that performance appraisals bring positive outcomes for their professional development. This suggests that the majority of appraisal interviews are poorly designed, and managers contribute to their ineffectiveness with the reluctance of providing constructive feedback and discuss relevant topics with employees on honest terms.
Lastly, performance appraisals may be very cumbersome for the company as to the financial aspect. Therefore, it is high time for managers to improve their performance management skills to facilitate conversation within the corporate environment, make sure that employees do their work, and establish trusting relationships that will become a basis for success in accomplishing assignments. Effective performance management will correlate with the enhancement of individual and group productivity, creating behaviors that align with the company’s strategy and providing a ground for making human capital decisions (Pulakos, 2004).
The key advice one may give to a manager to improve his or her performance management is associated with the notion of ongoing feedback. It has already been discussed that yearly performance appraisals rarely bring any benefits because they are conducted once in a long period of time. Similar to the way coaches train athletes, managers can also give their employees feedback in real time, so there is a possibility to improve quickly.
Moreover, ongoing feedback improves productivity within the company because managers can share their ideas instantly and give employees an opportunity to develop new skills. Apart from improving productivity, ongoing feedback influences the development of strong corporate relationships and increases retention in a position (Reynolds, 2016). Therefore, there is a variety of advantages ongoing feedback brings to the workplace ranging from maintaining engagement to eliminating any surprises during the review period. It is strongly recommended for managers to start giving employees feedback in real time and experience its positive impact.
The second recommendation that can be given to any manager in a company is measuring employee engagement. Many workers may be unsatisfied with their job, but the manager may have no idea about it. Employee engagement is a crucial component of performance management that is very often overlooked. It is advised for the manager to develop employee surveys that will act as “two-way communication tools” (McMullen, 2013, p. 25). The results of the surveys should be shared with the senior management as well as employees to cooperatively develop a cohesive plan for action. If managers never address the challenges identified in employee engagement surveys, workers will continue doing their work at minimum capacity just to get paid each month. It is crucial for managers to act upon the identified challenges and make sure that workers are emotionally engaged in the job they do (Markos & Sridevi, 2010).
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The last recommendation that can be given to managers is trying to answer the question of ‘What makes a good employer?’ So many managers are currently stuck in a rut and have no idea how to progress and effectively lead employees towards achieving success. A good employer is the one that supports the unique company culture, focuses on growing talent within the company, has a strong sense of responsibility, and inspires others through leadership (Looi, Marusarz, & Baumruk, 2004). As mentioned in the article by Gillian White (2014), it is often not money that endears workers to their employers. It is the action an employer takes to make sure that the company is on the right track, that employees feel secure in their position, and that there are benefits such as health packages provided to all workers. Despite the fact that it is difficult to account for all requirements of employees, a manager should think outside the box and establish strong relationships to become a truly successful leader.
Bersin, J. (2013). Time to scrap performance appraisals? Web.
Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Web.
Daoanis. L. (2012). Performance appraisal system: It’s implication to employee performance. International Journal of Economics and Management Sciences, 2(3), 55-62.
Heathfield, S. (2016). Performance appraisals don’t work. Web.
Kaine, S., & Johns, R. (2015). Why the days of performance appraisals should be numbered. Web.
Lawler, E. (2014). Eliminating performance appraisals. Web.
Looi, P., Marusarz, T., & Baumruk, R. (2004). What makes a best employer? Insights and findings from Hewitt’s Global Best Employers study. Web.
Markos, S., & Sridevi, S. (2010). Employee engagement: The key to improving performance. International Journal of Business and Management, 5(12), 89-96.
McMullen, T. (2013). Reward strategy and practice: Eight recommendations to improve employee engagement. Journal of Compensation and Benefits, 3(7), 23-29.
Pulakos, E. (2004). Performance management: A roadmap for developing, implementing, and evaluating performance management systems. Alexandria, VA: SHRM Foundation.
Reynolds, J. (2016). The importance of ongoing feedback. Web.
Sandlund, E., Olin-Scheller, C., Nyroos, L., & Nahnfeldt, C. (2011). The performance appraisal interview – An arena for the reinforcement of norms for employees. Nordic Journal of Working Life Studies, 1(2), 59-75.
White, G. (2014). What makes a good employer? Web.