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Are You Using a Standard Performance Appraisal Method?

Performance appraisals have long been designed to drive employees to achieve and/or surpass their objectives. But often, they do come with quite a bit of criticism as well. Performance appraisals have a problem in that it is difficult to identify individual or institutional performance. When making any kind of decision based on performance, managers must rely on feedback from the individuals concerned - and they aren't always trustworthy or forthcoming with such information.

A performance appraisal is designed to help you understand the performance of an individual and to measure it against established goals. This involves the definition of the measures used, and the evaluation of how these compare to the managers' goals. This evaluation can be time-consuming and tedious for many managers. It involves many interrelated activities, including periodic reviews to track performance over time, periodic re-evaluations to focus on the most important aspects of performance, periodic adjustments to policies and procedures, and periodic training and development opportunities. Many managers don't rely on the performance appraisal process because of its inherent inefficiencies.

When performance appraisal processes fail to provide managers with objective measurements of performance, they may not be able to accurately assess the effectiveness of their own strategies and plans. A company looking to lower its financial risk must develop and use a balanced scorecard application. This will allow it to identify and quantify all key risk factors. By developing and deploying a properly aligned scorecard application, the company can quickly and efficiently identify the actions necessary to mitigate risks - rather than reacting to each and every critical incident that occurs.

Most businesses cannot implement performance appraisal systems. Because performance appraisal systems are so difficult to implement and operate, many organizations choose to outsource their performance appraisal systems to external third parties. But, independent performance appraisals are not necessarily ineffective. In fact, there are a number of advantages to performing performance appraisal systems in house. The effectiveness of internal programs could be higher than that recommended by outside companies. They may also provide better alignment between the core business goals of management and short-term incentive plans. Additionally, performing performance appraisal internally allows managers to use their time on other productivity-increasing tasks.

The traditional performance appraisal process has a major disadvantage: it takes too much time to do detailed analysis. A supervisor must dedicate approximately half an hour per week for the basic process of performance appraisal, which includes completing an inventory item-by-item to determine which employee performed what task. During the same time, however, the number of employees performing sub-functions (such as customer support) must grow significantly. This means supervisors must devote up to two hours a week to perform a 360-degree performance appraisal process, which takes time away from the daily tasking of the staff. It is also common for managers to underestimate the complexity of some tasks, which can lead to inaccurate or incomplete evaluations.

People are not rewarded for performing well in traditional performance appraisals. Typically, a reward of some sort is issued when a supervisor presents a report of poor performance. Performance management systems provide information that can help employees improve their performance and avoid punishment. Performance appraisals help individuals understand and apply their strengths and limitations to current tasks.

Another common problem with the standard performance appraisal process is the use of biases and stereotypes. These biases do not reflect actual performance but are based on the information provided by others (especially managers). This can lead to employees believing that they perform better due to these "clues". Although some biases may do exist, using them to guide personnel decisions does not create accurate or useful results.

Because the performance appraisal process tends to be based on an individual's performance, some supervisors believe that it is unfair to compare one employee's performance with another employee. This type of comparison can result in the devaluation of an employee. Although the standards that employees use to evaluate themselves should not be as low as the ones used to evaluate their supervisors, comparing one employee's performance to another does not have to be done systematically and objectively. The supervisor can make any comparisons between employees as long as he/she has the discretion. Supervisors must be able to see any significant flaws so they can correct them.