Performance Appraisals and Their Impact

I could write forever about the value of performance appraisals. Or, about how they are needless morale busters. Or, how necessary they are to document performance in the event you fire someone. Or, whether the best format is closed-ended, open-ended, or both.

I’m not going to write about any of that. Rather, check out this series of articles. What I enjoy the most about them is that they go through the owner’s need to do the appraisals to learn more about his business, the steps in choosing an approach, the impact of the first appraisals (after not doing them for a while) and the second ones. There is a bit of a cliff hanger about what happens next.

Throughout you can sense the author weighing the positives against the negatives and his apprehensiveness about the effect the process will have on productivity and culture. One could not help but to be impressed with the owner sticking to his initial reason for implementing the program and staying with it. He wanted to find out where the problems were, even if he did not really want to hear about them.

My biggest takeaway was how the organization continues to evolve and change during the appraisal process. We frequently think of the ratings as something that takes place in a vacuum. The reality is that performance is a moving target—both for the organization (sales ebb and flow) and the employees (new people are hired, others change roles, etc.). The changes affected his approach to the ratings and what he hoped to learn from them.

You may be doing performance reviews because you have to or choose to. Regardless, when have you analyzed their impact on performance or your culture? I’ll bet that the reviews have the most positive impact on your best performers (good performers get that way by seeking and accepting feedback) and the most negative impact on your second tier of performers (“What do you mean I’m not in the top band?”). Believe me, your bottom tier performers know who they are and are unlikely to change for you.

The impact on your culture comes down to whether you are evaluating people on things that are seen as important by them and management, the process is transparent, and, if rewards are given based on the appraisal, are seen as unbiased (fair is a completely different topic). If any of these pieces are missing, you’ll breed more cynicism than necessary in the process and make it even more painful than necessary.

What are your goals in the performance appraisal process?

For more information on effective performance appraisal systems, please contact Warren at 310 670-4175 or  [email protected]

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