Why Performance Appraisals are a Waste of Time!

By James Adonis

Managers dread them. Employees resent them. They only come round once a year, and if you're really unlucky, twice a year. I'm talking about performance appraisals - the HR-inspired process of formally assessing employees that costs organisations millions of dollars each year - and does not work.

One study published in the Corporate University Review found that the tedious and lengthy process associated with performance appraisals costs organisations approximately $2,000 per employee each year.

The first problem with performance appraisals is in their perception.

Managers see the laborious completion of the appraisals, the writing of the comments, and the grading of their employees as torture. That's why almost every manager leaves them until the last minute, and in a huge number of cases, they're frantically submitted late. It usually takes incessant emails from HR and Senior Management for line managers to reluctantly finish them.

When employees hear that it's time for an appraisal, they get defensive. Even though many companies include sections where employees also give their feedback, let's face it, we all know what they're really for. They're used to analyse our employees' performance for the previous year, most of which has already been forgotten about.

And they're so lengthy. Some organisations have appraisal forms that are 20 pages long - 18 of which are just about organisational values and expectations! Newsflash: no-one's going to read them, and more importantly, no-one cares.

So why does almost every organisation bother with this time-consuming process? Reasons include:

• It motivates employees (Wake-up call: Employees are not motivated by having their performance formally reviewed once a year. They're motivated by intrinsic factors such as recognition, development, and job satisfaction).
• It creates consistency (The form is consistent, but the delivery of it is not and never will be. You can't get consistency in style when each manager is a unique individual).
• It's a protection from law suits (Potentially, yes, but any other means of recording conversations, performance, and feedback sessions will suffice. Your legal team will agree).
• It's a prompt for managers to review and recognise good performance (If your management team needs a trigger to do this once a year, you need a new management team, or at the very least, management training [call me!]. The reviewing and recognising of good performance is an inherent trait that managers should display every day).

A formal review process that occurs only once or twice a year can't possibly be effective, especially since leaving it this long between sessions can result in surprises. At performance appraisal time, employees should hear nothing new that hasn't already been discussed previously. The converse is commonly the case.

The solution is this: feedback needs to be a part of everyday life at work. It's all about having continuous dialogue. But according to Human Synergistics, Australian managers have the highest rate of avoidance leadership in the Western world. This means we shy away from giving negative feedback because we don't want to insult, offend, or upset people. And as a result, we resort to the annual performance appraisal as a substitute.

The world's most engaging managers don't just discuss their employees' goals at appraisal time. They make it a key plank of their motivation strategy and incorporate it into their everyday work practices.

The world's best managers don't just outline their expectations at the annual review. They make sure their direct reports have a clear understanding of what is expected of them and regularly reinforce it.

The world's most successful managers don't provide feedback just once or twice a year. They do it daily; in a constructive way when it's below par and in a celebratory way when it's outstanding.

It all comes down to one word: communication. Managers that frequently communicate with their team (and if you consider e-mail to be an engaging communication tool, think again), don't need to conduct performance appraisals. Their employees already know how they're performing, how to improve, and are confident that they're being developed so that they're well-placed to achieve their career goals.

If I haven't convinced you yet that performance appraisals are a waste of time, consider the reputable Society for Human Resources Management, which found that more than 90% of appraisal systems are unsuccessful.

And if you still remain unconvinced, fine. At least review the following tips so that your appraisals have a better chance of being well-received:

• Shorten them. They should be no more than one or two pages long.
• Hold them monthly. This way, there are no surprises when the time comes to review salaries.
• Provide your managers with training on how to deliver the appraisal; not in how to complete the form. The delivery of the appraisal is what impacts employee engagement, not the form.
• Change the term. Names such as 'Performance Appraisal', 'Performance Review', and 'Performance Management', have a negative connotation.
• Keep the number of objectives to a minimum. Appraisals that contain too many objectives make it difficult for employees to focus on the ones that matter. What you'll find is that there are three to five main objectives, which if achieved, automatically results in the less significant objectives being met as well. So just stick with the handful that matter.

We often get frustrated by our employees' inability or unwillingness to adapt to change - but we've got to lead by example. If we hold on to archaic processes such as performance appraisals when they're clearly not working, then we've got to tweak them, get creative, get radical, and try something new.

Maybe a performance appraisal of performance appraisals is a good place to start...?

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