Question

Annual performance reviews are common in many companies; how might they fail to motivate employees?

Answer 1

A performance appraisal is an evaluation done on an employee’s job performance over a specific period of time. It is the equivalent of a report card on an employee and how their manager assessed their performance over the prior year.

Technically, the fact is that all performance appraisal processes are not the same.The varying systems and processes are all over the map. Unfortunately, some are done so poorly that they are not only designed to fail, but also to create a negative experience for both the manager as well as the employee.

Companies and managers use a number of common appraisal methods to assess employee performance. Each technique has pros and cons. To determine which technique works best for your business, you need to understand the purposes of appraising performance. A performance appraisal should motivate an employee to better performance by helping him understand why he needs to move away from poor performance or toward critical objectives.

The graphic rating scale and behavioral rating scale are two common rating scale appraisal techniques. With the graphic scale, employees are simply assigned a score on criteria important to job success. The behavioral scale focuses on actual behaviors. Pros of ratings scales include ease of use and understanding. Many managers and employees are familiar with them. They offer a simple way to communicate areas of strengths and weaknesses. A common negative of rating scales is the assumption that they are directly tied to an employee's raise or bonus. This can cause score inflation. Managers can also have negative bias toward employees.

Successful organizations understand the importance of incorporating performance appraisals into their performance management process and strategy. Sometimes performance appraisal might fail to motivate employees because:-

• Review discussions don’t take place often enough.
• Reviews are not transparent.
• Reviews are not tailored to the individual.
• Managers are poorly prepared.
• If not done right, they can create a negative experience.
• They are based on human assessment and are subject to rater errors and biases.

Every employee should be able to understand which factors have influenced their individual evaluation.Which targets has the employee met, which ones not? Where was the performance above average, and where did they make mistakes? If employees don’t understand this, they will ultimately perceive their appraisal as a purely subjective opinion of their manager.

Some organizations do performance appraisals because they feel obligated to do them – because everyone else does.Some organizations do performance appraisals to make sure they have a piece of paper in the employee’s file – in case they ever need to do corrective action.