Abolishing Performance Appraisals:
Why They Backfire and What to Do Instead
by Tom Coens and Mary Jenkins
Format: Hardcover, 300pp.
Publisher: Berrett-Koehler Publishers
Pub. Date: October 2000
About eighty percent of workplaces subject their employees to annual
performance reviews, what human resources (HR) people call "performance
appraisals." Across the land, this perennial ritual has survived for more
than fifty years. Once a year, employees get uneasy and tense because they know
it's time for their annual appraisal. It's supposed to be a feedback session, a
time when the boss lets employees know where they stand, and a discussion about
development needs. Typically ratings are issued. The results often affect pay
raises and even promotion eligibility. With so much at stake, it's no wonder
that people get tense.
For varied reasons, the process doesn't turn out well. Again and again, we see supervisors procrastinate or just go through the motions, with little taken to heart. And the supervisors who do take it to heart mostly meet disappointment. Few employees react positively to the experience. Most employees politely go through the process with little enthusiasm, and a smaller number get defensive and embittered. Only about 5% of organizations requiring appraisal are satisfied with its results. Most HR departments re-design their appraisal process every three to five years---new forms, altered scales, and novel bells and whistles. The outcome? Déjà vu---most people are underwhelmed and the process fizzles again.
If 90% of organizations consider appraisal ineffective, why does it continue? One reason is its good intentions. Appraisal is intended to facilitate employee coaching and feedback and help employees develop and grow. Ratings seemingly provide an objective way to make pay and promotion decisions. Appraisal also is supposed to ensure that the organization has the legal documentation it needs to fire poor performers. These are worthwhile goals, and most people think that tossing appraisal means giving them up---no one would get feedback, pay decisions would be unfair, and there would be no documentation to defend against employee lawsuits.
Dropping appraisal, however, does not mean abandoning its goals. In fact, parting with appraisal is the first step toward getting serious about its functions, opening the door for exciting, new approaches that will really make a difference.