If promotions are what everybody—or almost everybody—wants, layoffs are what everyone wishes to avoid. But when economic realities force an organization to downsize, performance appraisal helps make sure that the most talented individuals are retained and that only the organization’s marginal performers are cut loose.
Without a solid and trustworthy performance appraisal system in place, real companies are going to be reduced to the level of government bureaucracies when the time comes to reduce headcount. They’ll avoid making tough decisions by using the last in/first out approach, rewarding seniority and tenure rather than talent and ability.
But aren’t talent and tenure correlated? Many times they are. But only a good performance appraisal system can tell you for sure.
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.
