Performance Appraisals- Are they really useful?

It’s the performance appraisals and budget time of the year.  Most of my Australian employees & colleagues are telling me the same story. They have been told to go this important yearly or even half yearly ritual so that they can improve their performance and identify training gaps.

 Every year most of these poor hardworking team players are evaluated on templates created within organisations which are mostly outdated. They do not consider how fast the market is changing or what impact social media marketing is creating. How everything is connected together and it’s just not the individuals alone that are determining the sales performance.  This performance appraisal tool never compares or lists the inbuilt systemic problems existing within age old corporations. They are still using age old software, archaic red tape approval process, while the new competition is swifter, smarter and leaner in nature, winning loads of business.

The problem really is based on 3 things. Firstly this tool called performance appraisal itself, which every year promises the moon and delivers peanuts.  It’s the way in which this tool is still used is the main problem. When the economy is going well, the credit for increase in sales going to company’s grand marketing plans and excellent sales structure, but when it’s down, it’s a case employees not adjusting  to changing conditions and letting the management down.  I am keen to know after showing a fantastic performance, how many people actually ever did get promoted? Bonus? How many promises made during the previous performance appraisal were honoured? Probably a small percentage out of the many!!  

Secondly, rather than sitting down in a neutral way and using this tool to its fullest extent, the approach is to lay down the law or budget and the great expectations from the employees without any structural changes or chances of value addition / promotion for the employees. The template adopted, itself, is biased.  It won’t address any of the company’s problems or highlight management changes which are really needed. It would always have a narrow myopic view of what an employee has done and should be doing.

Thirdly, if you really want to implement a good performance appraisal system then, I would suggest it’s more about fuller approach, implementation and follow up of the process which is the key. A clear indicator is if your HR team involved in the appraisal process? Do they also give importance to the process or it’s delayed until next week every week? Are any structural issues being considered? Who is going to be involved in the process? What benchmarks are being considered? Follow up?

At the end of the day, I would suggest managers who conduct performance appraisals to answer one simple question, who really is your business? It’s your people. If you motivate them, provide a good working environment, excellent systems and procedures they would achieve wonders.