Performance appraisals don’t work!

Recommended Reads:
Gray, G. (2002), ‘Performance appraisals don’t work’, Industrial Management, March/April.

Gray’s article ‘Performance appraisals don’t work’ (2002) is a paper which says that the process of conducting performance appraisals does not elicit the desired behaviours required from employees in the workplace. As a HR professional- you scream- but why not?!

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Gray argues that most managers are ill-equipped to carry out the task at hand and questions how a system can be objective, consistent and dependable if the manager executing it lacks the appropriate skills or training.

This is highlighted by a study undertaken by Coutts & Schneider (2004) which looks at the effectiveness of police officer performance appraisal systems in Canada. In this article, it was discovered that in terms of the perceived extent of performance appraisal training provided to supervisors who conducted performance feedback and appraisals, 21.6% of the participants indicated that there was no training provided, 67.3% indicated very little training was provided, and only 11.1 % indicated that substantial training is provided.

They argue that performance appraisal can only be as effective as the “task-relevant skills and knowledge” of those responsible for using it. Suggested skills that managers need to be trained in include their observational skills, how to reduce judgemental biases and how to provide meaningful and constructive feedback.

However, most interestingly Gray asserts that if performance feedback is used by organisations in the performance appraisal process this automatically means that a large proportion of the company’s employees are ‘average’ if they stick to a traditional bell curve or a forced ranking methodology. In this seemingly totem-pole process, each person gets a unique ranking against other employees in the business unit or function, whilst the bell curve system distributes employees into particular bands or categories (Loren. 2001). The inadequacy of this system is highlighted by the statement “only a few people can be best performers. Similarly, some people have to be slotted into the lowest rank, even if their performance, using a competency-based assessment, is satisfactory” (Loren. 2001).

Hence, a large proportion of employees under a bell curve or ranking method will be told they are ‘average’ and their development conversations will be based around this grading in the performance appraisal. Subsequently, this is neither accurate nor effective performance feedback, adeptly illustrating Gray’s (2002) main argument that performance appraisals don’t work.

Gray’s article is frank about the downfalls of many performance management systems and rightly so. These issues identified by Gray are ones that are currently being experienced by many organizations in contemporary society and it identifies areas for improvement and why current systems fall short.

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2 Comments

Filed under Performance Management

2 responses to “Performance appraisals don’t work!

  1. Marta

    I been in the HR and Organizational Development field for more than 10 years and I’m glad you have brought the subject.

    For a performance appraisal process to be effective is important to:

    Train supervisors: how to write performance expectations, how to align those expectations to the company goals, how to give appropiate feedback and how to influence and help people to make things happen.

    Not every company use the bell curve, I used to work for one of the best companies, worldwide, and we used to have many top performers. How we deal with that amazing fact? We created a new compensation system that allow people to grow within their role and keep having merit increases and bonus.

    A performance appraisal system could be a disaster if management is not prepare or well train, but It can be a success if the company is aware of the importance of measure individual performance to make sure operational goals are met.

    • hrclubsyd

      Thanks for your comments Marta.

      I don’t really like the necessity to stick to the bell curve- I hated it at Uni and I would hate to think that I was rated ‘ordinary’ because theer were more amazing people above me.

      I think performance appraisals have so much potential- but many companies aren’t fully utilizing this potential.

      I’d love to hear more about your experience in OD though!

      Jess

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