Performance Appraisals Are Dead, Long Live Performance Management
Performance
appraisals are one of the most frequently criticized talent management
practices. The criticisms range from their being an enormous waste of time to
their having a destructive impact on the relationship between managers and
their subordinates. Criticizing performance appraisals has a long history. For
decades, the literature on talent management has pointed out the flaws in most
performance management systems and in some cases recommended completely
abandoning them. The problem with abandoning them is that they are vital to
effective talent management.I cannot imagine a company doing a good job of
managing its talent without gathering information about how well individuals
perform their jobs, what their skills and knowledge are, and what their
responsibilities and performance goals are for the future. These types of data
are simply fundamental to the effective management of the talent of any
organization (and to its overall management). In a recent a study on
performance management in over fifty firms and found that every firm had a
performance management system. In some cases they were functioning
reasonably well. There were, of course, organizations that did not have an effective
system and were saying that they expected to either redesign their system or
cease doing performance appraisals. The latter is what you would expect
organizations to do if they followed the advice of many of the critics of
performance appraisals.Recently, another
look was taken at whether organizations
are doing performance appraisals. The results of the survey of one hundred
relatively large U.S. corporations provide some interesting data on whether
organizations are doing performance appraisals. The bottom line is that every
company responded that they do have a performance management system, and only
six percent said that they are considering getting rid of performance
appraisals for some or all of their employees. In short, the death of
performance appraisals is not occurring and is unlikely to occur. Companies reported that on average
ninety-three percent of their salaried employees receive a performance
appraisal, and typically they receive at least one every year. Only one company
reported that they had recently stopped doing evaluations for fifty or more of
their employees. The survey did find that, on the average,companies are not
more satisfied with their performance management systems than they were ten
years ago. However, the vast majority, about eighty-five percent, report that
their system is at least moderately effective.The obvious conclusion is that
companies will continue to do performance appraisals despite their shortcomings
and despite the many criticisms of them that appear in the management
literature.