Managers go wrong with performance appraisals in so many ways, that it’s difficult to identify all of them. Some of the problems have to do with the overall system of performance appraisal, and other problems are the result of the one-on-one meeting that is held for the appraisal interaction.
The systemic problems are rarely under the control of one manager. They are created by the people who have developed the performance appraisal system that the managers are asked to use, usually the senior leadership team and Human Resources staff.
Here are four of the big problems managers and employees experience with performance appraisals. If you are clear on the problems, you have an opportunity to fix the problems.
Performance Appraisals Are Annual
Start with the fact that performance appraisals are usually annual. Employees need feedback and goal planning much more frequently than annually. Managers may need to participate in the annual performance appraisal plan, but they have the power to provide regular feedback in addition to the annual performance appraisal.
Employees need weekly, even daily, performance feedback. This feedback keeps them focused on their most important goals. It also provides them with developmental coaching to help them increase their ability to contribute. The feedback also recognizes them for their contributions.
Employees need and respond best to clear expectations from their manager. Feedback and goal-setting annually just doesn't cut it in the modern work environment. In this environment, goals are constantly changing. Work is under constant evaluation for relevance, importance, and contribution.
Customer needs change with such frequency that only the nimble respond in a timely manner. It is what performance feedback needs to do—respond nimbly and with serious responsiveness in a timely manner.
Performance Appraisal As a Lecture
Managers, who don't know any better, make performance appraisals into a one-way lecture about how the employee did well this year and how the employee can improve. In one example from a small manufacturing company, employees reported to HR that they thought that the performance development planning meeting was supposed to be a conversation.
Their manager was using 55 of the 60 minutes to lecture his reporting staff members about their performance—both good and bad. The employees' feedback was relegated to less than five minutes. This is not the point of a performance appraisal discussion—a two-way discussion is critical so employees feel heard out and listened to.
Additionally, once a manager tells an employee about problems with their work or a failure in their performance, employees tend not to hear anything else the manager has to say that is positive about their performance.
So, the feedback sandwich in which managers praise an employee, then give the employee negative feedback that is followed, once again, by positive feedback is an ineffective approach to providing needed feedback.
So, it’s a combination problem. The best performance appraisals are a two-way discussion and focus on the employee assessing his or her own performance and setting his or her own goals for improvement.
Performance Appraisal and Employee Development
Performance appraisals rarely focus on developing an employee’s skills and abilities. They do not provide commitments of time and resources from the organization about how they will encourage employees to develop their skills in areas of interest to the employee.
The purpose of performance evaluation is to provide developmental feedback that will help the employee continue to grow in their skills and ability to contribute to the organization. It is the manager's opportunity to hold a clear exchange about what the organization expects and most wants and needs from the employee. What a lost opportunity if a manager uses the meeting in any other way.
Performance Appraisals and Pay
In a fourth way that performance appraisals often go astray, employers connect performance appraisals with the amount of pay raise an employee will receive. When the appraisal becomes a deciding factor in decisions about employee raises, it loses its ability to help employees learn and grow.
You will train employees to hide and cover-up problems. They will set their manager up to be blindsided by problems or an issue in the future. They will bring only positives to the appraisal meeting if they are a normal employee.
Don’t ever expect an honest discussion about improving an employee's performance if the outcome of the discussion will affect the employee’s income. Doesn't this make perfect sense? You know it does, so why go there? It should be one component of your salary setting system.
Let your employees know that you will base raises on a wide range of factors—and tell them what the factors are in your company annually. Employees have short memories, and you need to remind them every year about how you will make your decisions about merit increases.
If your company has a company-wide approach—and many companies do these days—even better. You will have support and backup as all employees will receive the same message. Your job will be to reinforce the message during the performance appraisal meeting.
Connecting the appraisal to an employee's opportunity for a salary increase negates the most important component of the process—the goal of helping the employee grow and develop as a result of the feedback and discussion at the performance appraisal meeting.
The Bottom Line
If you can influence these four big problems in performance appraisal, you will go a long way toward having a useful, developmental system in which the employee's voice plays a prominent role. It is the right way to approach performance appraisal.