Making the appraisal process more constructive

Performance appraisal is one of HR’s most important tasks and, frequently, a major challenge.

Designed to provide valuable information to both organisation and employee about performance and progress, the reliability and validity of results are often questioned. In addition, the process often meets substantial resistance from both managers and employees.

The unbearable lightness of being appraised

So unpopular are appraisals that Jim Heskett, writing for the Harvard Business School publication Working Knowledge in 2006, in an article entitled “What’s to Be Done About Performance Reviews?” suggested that employee performance reviews ranked alongside “undergoing root canal dentistry work on the list of least favourite things to do both for employees and managers”.

A survey by the Society for Human Resources Management (SHRM) carried out in 1997 by Malcolm Patterson, Michael West, Rebecca Lawthom, Stephen Nickell, entitled “Impact of people management practices on business performance, Issues in People Management” for the Society for Human Resource Management concluded that more than 90 percent of performance appraisal systems were a failure, with managers and employees saying that they viewed an impending review process with dread.

HR departments routinely report that they have a desperately hard time getting managers to deal with performance appraisal.

The traditional performance appraisal system was designed for a work environment where control of individual employee performance was an important function. Such an approach does not sit well in a modern, values-based, participative working model, because it seems a paternalistic, top-down and autocratic way of managing.

The HR department of a large organisation typically uses a standardised model for annual evaluation, which their managers and employees dread, dodge, fudge or bypass until they have, grudgingly, to comply with the system.

The users hate the forced comparison, box-ticking exercise they see foisted on them and if they collude to buck the system, there is not likely to be any buy-in to stretch goals that challenge and motivate employees.

In general, managers are not trained to do appraisals well, so employees do not feel that they get any benefit from the process and, consequently, HR has a nightmare on its hands trying to get all the data gathered in time for the salary evaluation round.

A performance appraisal system is, of course, supposed to address significant areas of concern to management and HR:

  • performance management;
  • alignment of individual performance with organisational objectives;
  • aiding employee development and growth; and
  • improved communication.

The aim is to improve the performance of individuals and the organisation as a whole, but for most it does not seem to work very well. A study by Development Dimensions International found that employers expressed overwhelming dissatisfaction with performance reviews.

How can HR professionals make the appraisal process more productive and less painful?

HR needs to sell performance appraisal as a development tool, and to persuade management of the benefits that will accrue.

An employee appraisal review ought to be an opportunity for dialogue between manager and team member; a chance for the employee to express his or her perspective on the role, the organisation, their manager,Search this site their view of their own performance, ideas to improve operations and processes and to discuss their aspirations to grow in their job.

An appraisal should be a time to stand back and review what works, what does not and what could perhaps be done better in the future.

To be successful, an appraisal needs commitment from both parties, and to be held in an environment where ideas and views can be expressed openly. Peter Honey, a psychologist and management consultant, said that while formal appraisal systems usually put the onus on the appraiser, “they work far better, however, when the appraise takes the initiative and is determined to use the occasion as an opportunity to solicit feedback”.

Managers need to work with an agenda set by the appraisee to discuss short and long-term career goals, skills to acquire, opportunities of interest, mentoring possibilities, and so on. The manager may add to the agenda, but in the first instance the employee “self-assesses”, the manager gives feedback, and then goals which align with organisational objectives can be set.

The appraisal becomes a negotiation, with the manager mainly concerned with what backing, support and resources the employee needs to achieve their goals.

A two-way conversation

If we accept that the prime responsibility of a manager is to manage the performance of people, and that this is best done proactively and with joint ownership, then we have to acknowledge that for appraisal to be a positive experience it has to be a two-way conversation, an exchange of ideas and information. One size does not fit all.

For a free-format process to work there has to be a climate of trust and respect. The manager needs to understand what motivates the employee. For a sales team that is relatively straightforward, but for technical and knowledge workers it might require more vision.

The performance appraisal rating system has to take account of how the employee ranks  their own performance, and an agreed rating that satisfies all parties must be established. This means that individuals need clear targets and standards against which to assess themselves. Here it is pertinent to point out that fewer than half (45 percent) of employees in the Cornerstone OnDemand/Harris 2012 US Employee Report, published in December 2011, said that their manager’s feedback at the annual review was fair and accurate.

Sadly, all too often, managers have no idea how to carry out a performance appraisal, and many lack the required interpersonal skills to do so effectively. Improving managers’ ability to deal with interpersonal relations and might therefore provide an environment more conducive to the development of better and more trusting relationships between managers and staff, and that in turn would lead to much more productive appraisal sessions.

A matter of life and death

Managers should understand that employees who have access to training, resources and development opportunities which improve their performance and help them to reach their career goals will be happier, more engaged and more empowered to become champions for their company. Employee engagement is not the only end that HR should have in view when they are selling the benefits of an appraisal system, however; it could be a matter of life and death.

Research conducted by Professor Michael West and Dr Susan Michie examined NHS league tables and concluded that people management, the psychological consequences of wellbeing for staff and staff experience, were “highly influential in influencing employee health and wellbeing, but also have an effect on individual, group and organisational performance, and thereby patient care and patient outcomes”.

As reported in People Management, the extent and sophistication of appraisal systems in hospitals was closely related to lower mortality rates.

West said: “If you have in place HR practices that focus effort and skill, if you develop people’s skills, and if you encourage cooperation, collaboration, innovation and synergy in teams, and you do this for most if not all employees in the organisation, the whole system functions more effectively and performs better as a result. The effects show across the board, even in measures of performance as fundamental as patient deaths in hospitals.”

A good appraisal system can therefore have a significant impact on the whole organisation. An Institute for Employment Studies (IES) study found that employees who had personal development plans, and who had received formal performance appraisals in the preceding year, had significantly higher engagement levels than those who did not.

Corporate Leadership Council research has suggested that interventions that involve measuring results and holding people accountable have less influence than more enabling interventions: the activities which added the most value centred around providing employees with specific, tangible answers and assistance to help them with their day-to-day jobs.

Engagement is known to be an important determinant of employee performance, and to influence positively organisational performance, productivity, retention, financial performance and shareholder returns. Promoting employee engagement is an imperative and so it seems reasonable to ensure that managers who must conduct performance appraisal sessions with their staff are trained, competent and comfortable to do so, if they are to achieve optimum results for all parties.

For a performance appraisal system to be really constructive, employers need to examine their attitudes about employees and what motivates them. Sadly, many HR professionals and managers feel more comfortable measuring results and questioning accountability.


Cornerstone OnDemand/Harris 2012 US Employee Report,

Heskett, J., Nov. 2006, What’s to Be Done About Performance Reviews?, Working Knowledge, Harvard Business

School, Patterson, M., West, M.A., Lawthorn, R. and Nichell, S. (1997) Impact of people management practices on business performance, Issues in People Management Society for Human Resource Management

This article originally appeared in the HR section of  Thomson Reuters Accelus website. Visitors need to set up an account to access articles and other information.

Michael is Chief Executive of 10Eighty. 10Eighty is a career and talent management consultancy that helps organizations maximize the contribution of their employees by ensuring satisfying jobs and careers for their employees.

Michael is a Human Resources professional, having worked in the National Health Service, Insurance, Commodities and Derivatives industries. He has worked within the career coaching business for fifteen years, both managing a £7 million business and delivering bespoke, one to one career coaching. In the last 15 years Michael has run businesses that have helped 75,000 people make successful career transitions.

He is a frequent commentator in the press/media, which includes a range of topics on “successfully managing your career” and talent management. Most recent media mentions have included BBC South, CNBC, Radio4, Financial Times, City AM, Financial News, Evening Standard, The Sunday Times, The Grapevine and HR Magazine, to name but a few. He writes a careers column for People Management, a blog for the Human Resources Magazine and is a regular contributor to The Thompson Reuters HR Portal. Michael is known as a thought provoking speaker in the HR industry. In the last 18 months, Michael spoke at the Careers Partner International Conference, NHS breakthrough conference, NHS North West Leadership Academy, London School of Economics, University of Westminster’s Talent Management Conference, ICAEW Finance Directors Conference, CIPD learning and development conference and CIPD branch seminars. He is also Chair of the CIPD’s Central London Branch. Additionally is a non executive director of Marshall ACM, an e-learning company and the Total Reward Group, a compensation and benefits consultancy.

Michael plans to publish his book “The guide to everlasting employability” in the Autumn 2012. He has just launched an iphone app “careers snakes and ladders” and an online interactive version of the book in collaboration with Marshall ACM to coincide the launch of his new business 10Eighty.

Michael has a degree in Economics, a MBA from Warwick Business School and is a Fellow of the Chartered Institute of Personnel and Development. He holds an accreditation from the British Psychological Society for the use of psychometrics. Michael has completed the Fairplace Internal Accreditation Programme, the training element of which is externally recognised by the Association for Coaching.

Michael Moran was until January 2012 Chief Executive of Fairplace and a main board director of Savile plc, the career and talent management consultancy. Fairplace is part of the Savile Group, an AIM listed plc. The Savile Group was placed 16th in the Sunday Times top 100 small companies in 2010.

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Michael Moran – CEO 10Eighty

A blog about career and talent management, things that might help you with your career and in your job.