A failed approach
- Annual Event: The appraisal is a yearly event that is initiated and mandated by the Human resource department of an organization.
- Employment Laws: The main purpose of performance appraisal is to have sufficient documentation about the employees and their records to protect itself from any malpractice or other violations of federal or state employment laws. It provides data to the HR specialists to ensure that the organization is in compliance with the common employment acts of discrimination, disabilities, workplace protection, equal pay, immigration, work opportunity etc.
- Essential Components: The standard features of any performance appraisal are.
- Accomplishments: The list of accomplishments in the past year are usually part of self appraisal, the managers usually reproduces it with minor modifications. The self appraisal itself depends upon the individual behavioral differences, how does one communicates the importance of the tasks, their difficulties etc in a way to differentiate with their peers. The fundamental flaw in the annual appraisals is that it’s not quite feasible to remember a year’s worth of work and a lot of details get lost in abstraction.
- Strengths & Weakness: An individual’s job related strengths and weakness, again based on self appraisal and managers try to influence it by their view points.
- Future Goals: These are usually based on the job demands and the projects. Sometimes it also includes any developmental plans or actions that are indirectly derived from weakness.
- Rating/Ranking: The employee is first rated based on his competency level required for the job. Then he is secretly ranked within the team or other organizational groupings. Though the rating is documented, ranking is often not, but it is what determines how compensation budget is distributed.
- Managers dislike it too: Contrary to popular belief, managers tend to avoid it and often view this as the hardest part of their jobs. They have to communicate about performance when the employee’s expectations are naturally high while managers are tight handed.
- Lack of Monetary Power: The first-line of manager usually has little influence on the team’s budget and raises. Hence ironically, though it’s the immediate managers who have the responsibility of getting things done, they have to convince their bosses with respect to promotion and raises in their group. Employees on the other hand perceive a contractual breach when their expectations are not met. It is then the manager’s job to somehow satisfy his boss as well as subordinate, and the way they do it is by always giving a properly worded feedback that even portrays the shortcomings in positive light. The appraisal are worded in rather vague language, conscious effort is to avoid any specifics that might trigger a confrontation.
- Project Management Vs Employee Development: Managers themselves are rated according to how many projects they could deliver, it’s the projects that are directly related to business objectives and are easily measurable. Coaching and developing an employees career is not an organizational objective and hence has little priority, except the risk of losing a skilled and productive resource. How an employee development is related to increase in organizational productivity is hard to practically measure, thus it ends up with individual’s initiatives on how his career grows in an organization.
- Collaboration Vs Competition: Performance appraisals rate and ranks individuals in the team, its basic premise are that team members should compete to win the rewards. Unless the organization has very specialized task division, it requires a good team spirit to deliver innovations and quality. While managers encourage and reap the benefit of team collaboration, appraisal presents a conflict-of-interest for the team members.
- Salary & Promotions are tied to appraisal: Appraisal is indeed a document that provides justification to the decisions of the organization. Quite contrary to the common notion, who gets what is determined prior to the process itself. The perception arises due to the fact that appraisals are scheduled prior to annual budget revision and deployment; hence appraisals are viewed as the probable cause.
- Tool for employee development: Performance appraisals fail to make any difference in the employee’s career and trainings, primarily because it’s a once a year event, once it’s done, it’s forgotten for next 12 months. Another reason is that managers are not leaders, they either have little coaching skills or they do not see it as essential part of their own job description. At the same time, most organizations are more concerned about the cost of trainings/coaching and fail to contemplate the long-term benefits of such measures.
Why it’s a failed approach?
- Designed to Fail: Any appraisal method is a review process that intends to evaluate the value of a resource, it’s comparative worth. It is not designed to increase its worth; it either praises the resource or outlines the flaws that make it less worthy. Consider the case of home appraisal, the home inspection data is analyzed to find the value of a home, the process doesn’t involve providing guidance about the renovations that might help increase the cost. It’s the owner’s responsibility to take the necessary steps, if he desires so. Same is the situation of performance appraisals, the organization considers its primary function to produce products and not employees skill development, and it’s the responsibility of the individuals to take charge of their careers.
The Solution: Performance Management System
In contrast to appraisal, the performance management is a continuous process of monitoring and mentoring/coaching individual and teams, while aligning the organization’s objectives to performance goals.
Sadly, majority of organizations today have an appraisal process and not performance management system. We call it a system rather than a process, since it includes a lot of components that interact with each other, like a closed system.
Organizations are evolving from a very specialized manufacturing units to more complex research & development units, if job satisfaction is truly a priority, then performance management is the only solution.