It all starts with two basic questions…
- Are formal appraisals worth all the time and effort?
- What is actually accomplished by conducting appraisals?
Here is a reasonable list of reasons to conduct performance appraisals. They:
- Provide managers with a useful communication tool for employee goal setting and performance planning
- Increase motivation and productivity
- Facilitate discussions concerning employee growth and development
- Provide a solid basis for wage and salary administration
- Provide data for a host of human resource decisions
They are suppose to accomplish all of those. Key word: suppose. However, there are problems associated with the design, implementation, and operation of formal appraisal systems, which are well documented, and things we know having previously experienced an appraisal. In other words, we have good intentions with the performance appraisal, but they don’t do what we need them to do.
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Each party (Manager & Subordinate) comes to the performance appraisal with distinct needs. There is disagreement between managers and employees on what constitutes an effective appraisal because of their different needs of each person. The appraisal is effective when two parties come together, engage in a conversation and leave with both parties getting what they need. Below is a translation or summary of a study conducted by researchers and published in the journal, Public Personnel Management. The researchers in the study sought to understand:
- What specific functions does the formal appraisal system serve?
- Do managers and subordinates differ in their perceptions of appraisal effectiveness?
- How can the formal appraisal process be improved?
They surveyed 47 managers & 207 subordinates from an organization that was well qualified (ex. Professionally developed and technically sound including procedure and rater training). Questions such as “…allows employees input about their jobs” were included in the survey with Yes/No response options. We can look at how much managers agree with subordinates and we can look at how much they agree or disagree with questions. Here’s the real data: The cluster of lines toward the top is where managers and subordinates agree that the performance appraisal is mostly effective. Managers and subordinates agreed to the following statements 68% of the time or more:
- It allows employees to give input about their jobs
- It informs employees where they stand
- It helps clarify the employee’s performance and objectives
- It facilitates the discussion of the employee’s development
There are four dashed lines indicating significantly different perceptions between the managers and the subordinates. The top two dashed lines indicate that the subordinate perceptions are significantly lower than the manager’s perceptions and include:
- Is an effective communication tool
- Helps improve the manager/employee relationship
The bottom two dashed lines indicate that not only are subordinates perceptions significantly lower than managers, but the majority of both parties disagree with these statements:
- Improves motivation & performance
- Effectively links merits pay to performance
The next question to answer is “How can the process be improved?”To improve the appraisal, both managers and subordinates agree that:
- More resources are needed to help reward performance
- Employees need to be more involved in the process
- Managers could use additional training
From the employees’ perspective, the manager is the key element in improving the appraisal. Subordinates suggest the need for more effective performance planning such as more ongoing performance feedback during the year and better performance monitoring by management during the year. These are hallmarks of performance management that extend beyond the process of the formal performance review. Ways to improve the performance process- Managers:
- Need more resources to reward performance: 47%
- Spread evaluations over the year: 40%
- Upper-level managers conduct appraisals: 36%
- Get employees more involved in the process: 32%
- More training for managers: 26%
- Reduce the amount of paperwork: 23%
- Consistency between managers in rating performance: 21%
- Reduce employee defensiveness: 17%
Ways to improve the performance process- Subordinates:
- More career opportunities and rewards: 52%
- Managers take time off to conduct appraisals: 41%
- Better clarification of performance expectations: 39%
- Reduce personal bias and favoritism: 36%
- Managers need more training35%
- More ongoing feedback: 30%
- Manager needs better knowledge of actual performance: 26%
- Greater emphasis on employee development: 22%
- Increased two-way communication: 19%
This may have been a little bit of information overload. However, the intention is to shed light onto the problem before fixing it. Deconstructing the problem will help us understand what is less effective to generate solutions. While solutions are presented, they are presented at a very general level. The first thing is to understand problems specific to your organization/business unit/team. To evaluate your performance appraisal, ask: Are formal appraisals worth all the time and effort? What is actually accomplished by conducting appraisals?
Longnecker, C., and Nykodym, N. (1996). Public sector performance appraisal effectiveness: A case study. Public Personnel Management, 25, 151- 164.