It’s essential for courageous leaders to ask the bold, imperative questions about
performance appraisals! What’s our purpose and aim in using appraisals? What are our strategies? Are they effective? What are the outcomes? Do they help us get closer to our vision or further away? Do they help create collaboration and teamwork or internal competition? How long does it take for our managers and staff to implement this process? What are the results and outcomes? Do they help us have a robust, dynamic learning environment? Do they help us coach, mentor, and develop our people? Or do they instill fear and resentment?
Does management use performance appraisals to judge, blame, and rate individuals on their performance when instead, they need to be focused on how the system performs? What are the results of the system?
Many organizations across the U.S. have never asked these questions. They have adopted a process of judging, ranking, and rating their employees. The practice is mired in incorrect assumptions about the necessity of appraisals. Human resource and talent management departments justify this practice by assuming appraisals must be given for the organization to understand who needs to be:
· laid off if the company needs to cut costs
· terminated with documentation
· aligned with the performance management tool (another fad?)
are two significant umbrella issues that illustrate the devastating impact of
using performance appraisals. First, most performance appraisals destroy
people. When people feel judged, criticized, and blamed, they are not mentally
engaged, motivated, happy, or healthy. Second, performance appraisals destroy
the health and impair the success of organizations. When people are devastated,
unappreciated, undervalued, or unrecognized
for their contributions, productivity decreases while absenteeism and turnover
How many people love to get performance appraisals? Except for the few people
who continually get great scores, the majority of employees are demotivated
after receiving their appraisal. They resent the process and sometimes even the
messenger. They disengage from the work they may have been happy with and
withdraw their contributions and efforts. Even if they did well on the
appraisal, they are often demoralized because they do not agree with some of
the comments or their ranking or rating. Few things can build resentment faster
than a performance appraisal gone awry—and most do go awry. Some people speak
up; others speak with their actions. They withdraw and are no longer the
vibrant contributors they once were until they find a new position and resign.
Some are emotionally devastated and never recover.
How many people love to give performance appraisals? Most managers
procrastinate getting their performance appraisals done and turned into HR.
It’s often not a pleasant conversation between the manager and employee,
especially when a manager feels like a judge of another person. Managers often
feel compelled to point out flaws and criticize people. Even if they think
that’s their job, it doesn’t feel good for either party.
Additionally, this process is time consuming and takes everyone away from their
real work. Managers and employees are anxious. Even when the conversation is
pleasant, one hurtful comment is often exacerbated.
A hardworking “star” employee can be traumatized when the manager’s appraisal
doesn’t reflect the commitment the “star” has had. What is the cost of the
performance appraisal process to an organization? Depending on the size of
their department, managers can spend an average of two hundred hours per year
completing, conducting, and reviewing appraisals for their employees.
At the minimum, let’s say that an organization with one hundred managers has an
appraisal process that costs $20,000 in time (managers, employees, and HR
documentation). Can you imagine the cost for organizations like the military,
government agencies, universities, or public corporations with more than fifty
thousand employees? It’s millions of dollars of waste! What can replace the
Marcia Daszko is the
author of “Pivot
Disrupt Transform” and a leading business strategist
and catalyst for
leadership and organizational transformation. She believes and teaches
innovation in leadership thinking. She has 25 years of proven success as a
Founder and CEO of a consulting firm, Marcia Daszko & Associates, and is an
executive team workshop facilitator. https://www.mdaszko.com/