Why Performance Appraisal Forms Are an Outdated Practice and What Is the Alternative to Them?

Performance appraisals are used on a global scale by an unprecedented amount of both commercial and non-profit organizations. They are great for the assessment and evaluation of individual workers’ performance on the job.

This, in turn, provides a perspective on what each individual employee lacks, what they excel in, and what training they should get to move forward.

Having a solid, reliable team is critical for any business that doesn’t want to flush its budget down the drain. Thus, managers, CEOs, and other bosses turn to employee appraisal forms to get some sort of detailed understanding about their workers.

At least this is what they think. We, at Vectorly, decided to dig deeper and try to find out if it’s actually true. So, let’s start with

Seeming Benefits of Appraisal Forms

Once again, organizations use performance appraisals for the assessment and evaluation of their employees. These forms are normally utilized to look into the job growth of each worker and for goal and benchmark setting they would need to achieve during the course of the next period of appraisal.

It is widely believed that employee appraisals are a very useful tool, if supervisors and managers understand their benefits. But, what are these benefits exactly?

Need Targeting

Employee performance appraisals may focus on a particular weak area that requires assessment and correction. One can also use them as a worthwhile tool in setting the goals that would potentially lead to future promotions and career growth.

Assuming this is entirely true, the use of employee appraisals as a means of exposing workers’ training needs lets the organization focus its efforts on particular areas that have to be reinforced.

Progress Monitoring

Another supposed employee appraisal benefit is that one can use it to monitor progress. Comparison of appraisals conducted at one point with those conducted at another are considered an effective way of providing a perspective to both the employee and supervisor on improvements, worsening, or relapse in respective job areas.

HR departments seem to particularly love these data. This includes promotions, firings, demotions, and salary increases among other factors, all of which reflect each employee’s progress.

Communication Building

Both employer and employee can discuss job performance on the basis of performance appraisal forms. Regular meetings between employees and supervisors help them reinforce their relationships and, thus, boost work efficiency.

Employee performance appraisal form is considered an additional and clearer communication line for the worker for provision of new proposals for the company’s projects and overall function or even applying for future promotions. In other words, it’s a safer way to move up the career ladder through clearer communication.

Employee Motivation

Appraisal forms are also frequently considered to be effective motivational tools for workers. Some companies have special bonuses for employees that manage to improve their appraisals over a particular period.

This usually doesn’t mean an employee has to find their own way of learning new stuff, as organizations often provide training seminars and courses along with other additional education perks that are meant to help improve work results and, thus, have better appraisals, as a result.

Companies That Actually Benefited from Appraisal Forms

One thing for sure, all of that is not just empty talk. There are companies that have benefited from this practice.

Some of them are some big beasts, including General Electric, Cargill, and other businesses from a wide range of market niches. Let’s take a look at two serious players and how they benefited from conducting employee performance appraisals.

Google

First of all, it should be noted that Google has always been a bit unconventional in its performance management and never used formal rankings. The company has adopted the objectives and key results – also referred to simply as OKRs – to set goals and track employee performance.

In other words, they took some basic concept of employee appraisal patterns and turned them around, so they would work well for the organization. Google nourishes and continues to refine this approach, as it helps the company drive its workers toward better creativity and more effective achieving of the set goals.

There’s an important lesson here for all the bosses out there, who try to do it the traditional way. Instead of imposing its perspective on employees, Google decided to help them develop their professional and personal skills.

And, if you take a closer look at what employee appraisal forms are focused on, you’ll see that they’re more about evaluation, rather than development, hence the paradox – they should help grow, not stagnate.

Adobe

Like Google, Adobe introduced its own performance management system – Check-in – that was meant to provide seamless performance tracking and lead to worker experience transformation within the organization.

They created a special task force that had to closely partner with the company’s team of executives. Before the system was implemented, Adobe’s employees from all levels could take part in the decision making process. In other words, the company was focused on communication from the beginning. In order to scale the new program, they created the Employee Resource Center.

When the new performance management system was executed, Adobe started receiving regular check-ins and continuous feedback. This helped them reduce voluntary dismissals by over 30%. In the same time, the company realized that there were lots of people that should have been fired and proceeded with their release. This was the result of the continuous feedback.

As a result, Adobe managed to establish regular, complex discussions between its managers and reports. Those employees that couldn’t meet the set performance goals were dismissed without the chance to achieve these milestones during the next performance appraisal period that sometimes could extend to a year.

Some may consider this a rough cutting off, as ineffective employees were released from their duties, but the company has ultimately increased its productivity and efficiency by focusing on those employees that performed best.

Sounds Like There’s Bias Somewhere in There

While employee appraisal indeed does provide results, if carried out diligently, it doesn’t exactly mean that it provides the best result – in both the general sense and for your business in particular.

And while there is no perfect solution, it doesn’t mean that you should simply use whatever doesn’t completely destroy your company.

The devil is in the detail. When evaluating employees, managers commit tons of mistakes. Not that they are necessarily malevolent – it’s just a human factor. Judgment errors and biases can and will negatively affect the evaluation process.

These biases are associated with measurement distortions. Let’s take a closer look at them.

Bias #1. Initial Impression

Managers develop an overall impression about the employee in question based on characteristics of the latter identified by the former. Considering this fact, you can’t expect to get an objective base for employee appraisal.

Bias #2. Halo Effect

The employee’s performance is entirely assessed based on a perceived positive trait, feature, or quality of theirs.

Plainly speaking, if a person is high or low in one specific trait, managers tend to consistently rate them high or low in other traits, respectively. That is, if an employee’s attendance is generally very good, their supervisor could give rate them high in all other work areas.

Bias #3. Horn Effect

According to this bias, an employee’s performance is entirely evaluated based on a negative trait perceived. That means that one negative feature will most probably affect all other areas and result in a lower rating.

For example, if a person doesn’t dress up according to some seeming ‘appropriate’ standards, they may be considered disorganized or careless in their duties.

Bias #4. Redundant Lenience or Stiffness

Depending on the manager’s personal standards at the time of performance appraisal, employees could be evaluated too leniently or too strictly. Some supervisors may feel extremely benevolent and provide higher ratings, while others’ stance could beg to differ and impose the strictest assessment one could imagine.

None of these is actually beneficial to any organization in the long run and can bring the entire structure down because an incompetent person has been rated too high or a valuable professional rated too low.

Bias #5. Central Tendency

Some managers may provide all the workers with an average rating. They simply believe that they shouldn’t rate anyone high or low and just equalize the chances for everyone to grow. But, in a nutshell, the effect is rather similar to the one described previously.

Bias #6. Personal Bias

Whether a manager likes those, who work in their department or not also has an incredible effect on the performance appraisal results. Personal bias can include a wide range of initial factors, such as belief system, social status, some information overheard in the office, and even ancestry, while each employee should only be evaluated based on their skills and achievements on their position.

Bias #7. Spillover

This is when the current performance is appraised based on past performance. That is, if you have done great in the past, you are still great now. Respectively, if you weren’t a great worker in the past, you still must be a letdown.

Bias #8. Recency Effect

In this case, managers perceive employees in question based on the most recent behavior. That means they ignore everything, not related to the present moment, including common behaviors displayed during the whole period of appraisal.

Is Performance Tracking without Bias Even Real?

As you can see, employee appraisal is full of biases and cognitive errors, entirely conditioned by the human factor. All of the appraisals are accompanied by one-on-one discussions, so these biases can’t be avoided.

However, some companies do find a way to go around this and get the best of what they have, focusing on the right things and letting their businesses flourish, as cases of Google and Adobe suggest.

But you can say, “Hey, we’re not a huge corporation over here and our needs are much more modest, than those of Google and the likes, so what do we do?” And you will be absolutely right to ask this question.

Our answer would be, “Come and check on what we do at Vectorly!” We have devised a tool that any manager can put to use in their team for performance monitoring and training. And, believe us, this is not rocket science – it’s intuitive, simple, and you can set it right within minutes.

The best thing about it is that you get rid of the biases! You just connect Vectorly to your work apps, such as Trello or Jira, and then work with crude data, monitoring how well your workers perform on their positions, how good they are at meeting deadlines, etc.

In other words, we have created something that will help track your team’s progress and at the same time help you move up the success ladder through training and achievement of new goals. What more could you ask for?

We’re going to take a detailed look at how Vectorly works in future articles, so stay put. But, as for now, make sure to visit Vectorly.team and sign up for a free trial to try it out and get all the perks!

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