Annual Performance Appraisals have always had mixed reviews. Managers do not like it because of the time consuming process and employees do not like it because of its perceived unfairness. The entire exercise loses the original intention of improving employee learning and performance and becomes a dreaded process.
In a survey by New York based On Point Consulting, only slightly over 40% of line managers and HR Managers think there is value in a performance management process. While the tool by itself might be useful, the prevailing culture in an organisation is critical for its success.
One way to improve is not to just do the annual appraisal but schedule quarterly meetings to discuss performance and make the meeting a feedback event. This requires managers to be coached.
A successful performance management system should:
1. Help employees build their skills and competencies
2. Is consistently applied across the organisation
3. Uses a rating scale that enables differentiation of performance
4. Helps to build a performance culture
5. Provides data for succession planning
6. Drives Leadership development initiatives