Is there any management process that is as mocked, as resented, as disparaged as performance appraisal? Scott Adams might have to retire his Dilbert cartoon if he didn’t have performance appraisal to lampoon.
And the way that performance appraisals are done in too many companies makes it easy for the scoffers to scoff and for Scott Adams to find a wealth of material to satirize.
But let me be blunt. Performance appraisal, mocked as it may be, is genuinely important. Lets look at all of the different organizational purposes a performance appraisal system serves. And then, in the entries to come, I’ll explore each one and why it’s important. Performance appraisal:
- Provides feedback to employees about their performance
- Helps determine who gets promoted
- Facilitates layoff or downsizing decisions
- Encourages performance improvement
- Motivates superior performance
- Helps set and measure goals
- Identifies poor performers for correction or termination
- Helps determine compensation changes
- Encourages coaching and mentoring
- Supports manpower planning or succession planning
- Determines individual training and development needs
- Determines organizational training and development needs
- Confirms that good hiring decisions are being made
- Provides legal defensibility for personnel decisions
- And finally, if it’s done right — improves overall organizational performance
About the Author
Dick Grote is a management consultant in Dallas, Texas and the author of several books. His most recent book, How to Be Good at Performance Appraisals, was published by the Harvard Business Review Press in July 2011.
