Difficulties with traditional
performance appraisal systems For many, the term 'performance
appraisal system' embodies the major difficulties with these traditional
approaches. The performance appraisal itself suggests assessment of the past rather
than improvement in the future. A performance appraisal system suggests a tightly
controlled, formal, procedure which limits the scope of the discussion and activities
of the manager and employee. Consequently both parties tended to view the performance
appraisal interview with apprehension (at best) or at worst judge the process
a waste of valuable time. 3.1 A focus on the
past Most performance appraisal systems are based
upon an assessment of the past. Whilst it is much easier to assess the past than
the future, viewing the performance appraisal as a control and maintenance system
does little to realise future performance improvement. A consideration of future
potential, opportunities and development needs is an essential planning aid for
both organisations and individuals in the context of rapid change and the need
for a high degree of flexibility. Future performance improvement needs organisational
investment in development but this, together with succession planning, is often
very poorly managed if at all. Learning objectives, the learning potential,
the opportunity to apply learning and the means by which learning can be acquired
all need identifying, and all need the close support of line managers, hence the
evolvement of performance review and development systems. To ensure that
the evolution from the (ineffective?) annual performance appraisal
interview into today's continuous performance review and development systems is
successful usually requires the support of personal development portfolios
and competence definitions. 3.2 Performance
appraisal and use of quantifiable measures Rating scales and quantifiable
measures do not always reflect the true value of an employee. Depending
on the role, non-quantifiable behaviours (such as motivation, ability to learn,
quality of work) should also represent important factors within the performance
appraisal process. Once a list of quantifiable factors becomes established,
employees will often modify their behaviour (without being told) to maximise their
performance in those areas. 3.3 Traits are inputs
to work, not outputs Traits describe a person's characteristics
and approaches to work. They represent what somebody puts into the job. They do
not necessarily predict or reflect the outcome or results of a person's work.
The problem is similar to the difference between effort and achievement.
Organisations which put a premium on effort in the performance appraisal
may not necessarily yield high performance improvement. Those which put all performance
appraisal emphasis on results may appear to be insensitive towards employees'
personal contributions. But where performance appraisal systems
value achievement, the degree of change, and self determination, then the consequential
developmental cultural will produce high value results for both the individual
and organisation. 3.4 Traits are subjective Trait
based measurements are inherently subjective and require judgment on the part
of appraiser. The difficulty here is that any performance appraisal system
utilising judgment criteria will generate markedly different results between different
appraisers. The outcome of a performance appraisal may therefore depend more upon
who is the appraiser than upon actual performance. A particular problem identified
in this area is the 'Halo' and 'Horns' effects, as described by Philip (1990).
3.5 Conservative use of performance appraisal
rating scales It has been found with all performance appraisal
rating scales that there is a very high tendency to only give middle range scores
(e.g., British Psychological Society, 1987). The consequence is that both high
and low performers are not recognised and managed (rewarded or punished) accordingly
and therefore the performance appraisal system is ineffective. Appraisees
have an awareness of how well they are performing compared with their colleagues,
they do talk to each other about their performance appraisal results and unless
the performance appraisal process fairly utilises the full rating range the performance
appraisal system itself will rapidly become discredited. On the other hand
performance review and development systems focus on self realisation of individual
potential and not some arbitrary comparison with colleagues that often results
in conflict. 3.6 Pay awards 'unrelated' to performance
appraisal In systems where there is a time lapse between the performance
appraisal interview and the pay award itself, there can grow a concern
either that performance has not been fully recognised or that the calculation
is somehow fudged. In addition, employees still know that the performance appraisal
does have a bearing on the pay award, however hidden. Many organisations
today prefer a more open and honest approach. 3.7
Annual performance appraisal emphasising formal procedures It
is now recognised that employee performance appraisal is a key responsibility
of the line manager. For the manager to take full responsibility, they have to
continually monitor, review, feedback, and discuss performance improvement during
frequent, and informal, meetings with each employee. A formal annual performance
appraisal can falsely suggest that this effective informal process can
be replaced by the formal annual meeting. This
is counter productive to creating a result orientated culture, fueled by
development. Documentation supporting the performance
appraisal interview often reinforced this by describing the formal procedure
in great detail, with only a passing reference to informal meetings and continuous
development. 3.8 The limits of only two performance
appraisal views Where the performance appraisal
only required input from the appraiser and the appraisee then the performance
appraisal process will potentially miss the rich sources of feedback that can
be offered by peers and subordinates, hence 360 degree appraisal. This information
can often reveal problems in perceptions of roles and the quality of working relationships,
including that between the appraiser and appraisee and the need for the appraiser
to accept criticism. In organisations where team working and open management
are encouraged, the performance appraisal process will recognise
the value of the information gained from these sources. 3.9
Performance appraisal forms can impede wider discussion Completing
a performance appraisal form can easily become the task object,
rather than a performance improvement review. In addition, performance appraisal
forms are often generated by personnel departments and do not always cover the
real performance improvement issues between a manager and employee. The
one performance appraisal form cannot deal effectively with organisational
diversity. 3.10 Performance appraisal objectives
are not always measurable Much criticism has been made, by employees,
of the use of performance appraisal objectives. Managers who cannot set SMART
(specific, measurable, achievable, realistic, time-based) objectives are accused
of changing the goal-posts, creating confusion and increasing the performance
appraisal standard without performance related pay recognition or increase in
grade. This is often because performance appraisal objectives are not related
to the goals and direction of the business or the department. Hence the
movement towards performance review and development systems. 3.11
Different performance appraisal schemes for different employees Diverse
performance appraisal systems are often introduced because of
the need to measure different factors and reward in different ways. However,
different performance appraisal systems risk being divisive and causing resentment. If
the use of different performance appraisal systems generate 'us and them' attitudes
they will be divisive, in which event it is unlikely that the performance appraisal
process will be much more than a meaningless paper exercise. Better to
differentiate between roles, and attendent competence definitions, using the 'level
of work' principle, than having separate performance appraisal systems. Our performance appraisal services can be supported by online HRD management and elearning click here for a FREE trial license. For a system description see www.hrdonline.co.uk | 
