Most companies carry out a performance appraisal program because it is a standard business practice and expected by most employees.
In larger companies the process can be very detailed and time consuming. In smaller companies it is usually informal and without factual data to back it up Performance appraisals are often poorly performed leading to declining morale for both employees and managers. Employees dread it and managers don’t like doing it.
One reason for this failure is that appraisals are not based on fault. Managers are too busy to keep formal records of individual performance and they don’t need such records because they know who is doing a good job and who isn’t. Memories are frequently short term. When review time comes we are mostly influenced by events that have recently occurred.
Only if a record of notable events is kept throughout the year, is it possible to provide a fair and equitable appraisal. It is important to establish measurable goals. This takes away the subjectivity and replaces it with numbers that are difficult to dispute. Subjectivity can be perceived as a bias and seen from an employee’s perspective as favouritism.
Why Have Performance Measurement?
Many managers question the value of performance appraisals and the time involved conducting them. Here are five good reasons:
- It focuses employees on company objectives.
- It is a good forum for communicating with emp1dyees.
- It provides a basis for disciplining poor performers.
- It identifies areas for employee development
- Employees want them.
While I believe that each one of these reasons is valid, the last reason is the most important. It is the greatest motivator and will have the largest impact on improving employee effectiveness.
After meeting with group after group of employees, the answer is always the same. “We want an appraisal that will tell us what we are doing well and what we need to do to improve. But don’t just tell us we are doing a good job.”
This can be illustrated by the following story. A company vice-president called his executive assistant in for her annual appraisal. He handed her the appraisal form on which were written two words “Good job”. The executive went away totally deflated. Her hard work over the past year had only been worth two words. Since she was looking for real input, the end result was an employee who saw no reason for trying to improve. Needless to say, the performance appraisal was a useless exercise and probably did more harm than not having a program at all.
Managing Performance in a Small Organization
Management in many smaller organizations often feel they don’t need a performance appraisal program since everyone knows where they stand. Managers will also complain that they don’t have the time to conduct appraisals.
A simple program will just require that the manager and the employee sit down at the beginning of each company year and agree to 3-5 objectives that management wants the employee to accomplish. Each objective should have a time frame with measurable terms. During the year the manager should follow-up with the employee to see what progress is being made towards the objectives. If the objectives can’t be easily measured, it is more important to keep a log outlining the events pertaining to the objectives.
Prior to the year-end appraisal meeting, the manager should review the log and use it as the basis for the appraisal.
What Can Come From Appraisals?
One of the key benefits is providing a good communication forum. Both the manager and employee are encouraged to express their views of the employee’s performance. This is done in a composed manner unlike the more stressful situation when the employee has made a mistake on an order that is already late.
A second benefit is that it allows management to better direct employees’ efforts toward company goals and objectives. When employees know that they will be appraised on an issue, they become more focused.
Another benefit is that an appraisal program provides an opportunity to identifY an employee’s weaknesses and develop a plan to overcome them. By attacking shortcomings early the company can sometimes save the loss of an employee that might occur if the problems were allowed to continue. To be successful make sure the appraisal program is fair and is perceived as being fair.