What a waste of money!

Recently we were introducing a new performance appraisal program that we had designed into a client’s organization. Part of our work entailed conducting training and orientation sessions for the total employee body.

We started our session by asking the question, “Who looks forward to their performance appraisal?”

When working with the management group we added the question, “Who looks forward to doing employee appraisals?”

Over 90% of those questioned responded in the negative. They did not like doing appraisals and they didn’t like being appraised.

In spite of this negative reaction to their current process, most if not all thought that a well-conducted process was desirable since they wanted to be appraised and know where they stood with the organization.

The above-described situation is common in many if not most organizations.


The negative reaction to performance employee programs is frequently centred on a few components of the program.

Management has no objectives for the program.

The program is subjective.

The purpose of the program is not made clear to employees.

It has a “report card” mentality

The terminology is emotionally charged

If an organization can address these issues it is well on its way to changing performance appraisal from a negative experience to a positive one.

Appraisal Programs are Costly

A couple of years ago we developed an appraisal audit program. Its objective was to audit organizations’ performance appraisal programs and determine their health. In preparation for the launch of this service we decided to do some research into the cost of the performance appraisal process.

Our research was very simple and limited in its scope. We surveyed a number of organizations in Canada and the USA, in both the for-profit and the not-for-profit sectors to find out how many hours per employee were spent on the Performance Appraisal Process each year.

Time spent on Performance Appraisals ranged from a low of 3 hours to a high of 30 hours per employee, with the average around 15 hours. When asked before learning of our results, a number of executives thought that 15 hours was too low a number.

Taking the average number of 15 hours, for each 125 employees an organization has, it expends one man-year of time doing employee appraisals.

I have always been a strong proponent of Performance Appraisal Programs. However, organizations will often be better served by not doing performance appraisals than by conducting them and getting such a negative response as described above.

Correcting the situation

Having worked with Performance Appraisal Programs on both sides of the Atlantic and in a wide variety of companies and cultures, I have concluded that there isn’t a perfect performance management process. However there are some programs that are better than others and that are perceived as being better by management and the employees.

To move from a despised and loathed program to one that is perceived as being constructive and beneficial does not require a major investment of money. It does however, cost work and perseverance on the part of management and employees.

The result of a well-designed and well-administered program is a more effective employee body with a more positive outlook on their jobs and on the organization for which they work.