Looking Beyond Performance Appraisals

When performance appraisals go wrong, the team atmosphere can get negatively affected. Managers do not know how to follow up with the employees without causing further acrimony.

- Dr. Neha Manchanda

After an illustrious run of over half a century, performance appraisal, the dreaded annual ritual, is finally nearing its demise. The writing was on the wall for a few years now since stacking employees against each other and firing the bottom percentiles is no longer acceptable. Why so? Because the process has become so bureaucratic that it remains as an end in itself, rather than actually shaping performance. Everyone is so focused on the process that the outcomes become insignificant. Employees hate it. Managers hate it. HR departments themselves hate it.

Performance appraisals were adopted with a clear-cut intent - keeping employees accountable, rewarding those who excel, and tracking performance over time. While in principle these are enormous benefits to be gained, it is the structure and execution of most appraisal systems that have failed employees across the board. 

Subjectivity: Being heavily dependent on the opinion of a single person, the process is inherently subjective. Reviews are often riddled with personal biases - conscious or unconscious. Using rating scales only creates an illusion of objectivity. Ask any Manager about how he or she decides ratings and the answer will almost always be ambiguous. 

Design: The idea behind performance appraisals was to initiate 1-on-1 discussions between managers and employees, to openly discuss their performance and what can they do to better themselves. Instead, managers are handed a standardized format of what they need to ask and how to assess each employee. The problem with a standardized process is that it assumes every employee to be the same, and therefore, leaves no scope for idiosyncrasies that make us unique.