Appraisal | Are Appraisal Systems really dead?

Plenty has been written in recent years about the decline of the performance appraisal, in fact, according to July’s People Management magazine, just 4% of HR leaders feel that their appraisal systems or processes are effective. However a survey by CEB found that the overall results and productivity of firms that ditched performance appraisal fell by up to 10%, employers felt that pay rises were less fairly allocated and managers reported increased difficulties in managing talent.

It’s hardly surprising though when you think about it – just because a process isn’t being executed well doesn’t mean the process itself is at fault. Cleaning your teeth is a process that is highly effective in preventing tooth decay – but if you do it too infrequently or inconsistently there is every possibility that you will end up with a painful visit to the dentist.

When it comes to appraisal systems or processes, one criticism is the fact that the approach is retrospective focusing more on the past more than the future. Perhaps the fact that so many companies use the term performance review emphasises this problem. We recently conducted a review of the evidence around performance management in conjunction with the University of Southampton (download it here) and it is very clear that performance management does drive performance but only IF the focus is on goal setting and regular review or feedback. So, we are talking about a collaborative, forward focused activity with shorter more frequent review points.

Are businesses really ditching their appraisal systems?