Is Performance Appraisal such a bad phrase?

Is Performance Appraisal such a bad phrase?

Are you one of those who hate the phrase Performance Appraisal? Does every mention of the phrase make you cringe?

If yes, then you are among the majority of population which shares your view, managers and employees alike! Recent studies have shown that not only is traditional performance appraisal viewed as an unnecessary evil, it is also proving to be insufficient to analyse an employee’s true worth.

By definition, A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organizational objectives.

Here, more often than not, a periodic process means an annual process, during which the individual has to achieve 100% of the objectives that are set by the company. If it is any less than that, his appraisal is subsequently reduced. Achieve more than that, you are sure to get more. Though in this case, your objectives for the coming year will be set much higher than what would have been set for 100% achievement.

Performance appraisal is a major component of traditional performance management, something that majority of organisations follow to this day. Since it has been an age old practice, some organisations carry on doing it without understanding its drawbacks which causes a lot of waste of time and money. The management should be able to assess whether these traditional performance management concepts are really necessary or should they go for more modern techniques such as Agile Performance Management.

There are many differences between Traditional and Agile performance management. One of the biggest being, the former concept believes in carrying out annual evaluations of employees based on which their appraisal takes place whereas Agile focuses on developing the employee on a continuous basis to increase his productivity. Performance appraisal is more of an HR process as it is primarily used to determine the compensation of employees for the coming year.


There are various problems associated with annual performance appraisal:


Difficult to analyse annual performance:

You can see how it can be difficult for managers to track his entire team’s performance for the whole year. There can be instances where employees have performed phenomenally at the beginning of the year but they might have slacked as the year progressed. In such a case, it is a normal tendency of managers to remember the most recent performance and perform evaluations keeping this in mind.

From the employee’s perspective this is quite unfair. His earlier contributions need to be taken into consideration and reasons for his latter poor performance should be found and addressed immediately.

Lack of timely feedback:

As evaluations are done annually, you do not get feedback on time, be it positive or negative. If an employee is performing inefficiently, it is essential that he be given feedback from time to time to get him back on track. Repeating the same performance will only add to loss in his productivity as well as his team’s.

On the other hand, if he is performing really well, he should be given positive feedback to let him know that his efforts are being acknowledged. Recognition is one of the most important performance enhancer at the workplace.

Feedback should be given on a regular on basis throughout the year.

Failure to consider cross-departmental work:

Today, the work place is so dynamic that employees from one department work in collaboration with employees from other departments.

For example, Marketing guys need to work with Sales guys to understand market scenario and come up with innovative ways to reach out to their target market.

In such a case, the Marketing manager alone cannot evaluate his team’s performance. The sales manager should also contribute his observations and give ratings accordingly. If this is not considered, the employee will only halfheartedly carry out his responsibilities or he may even simply stop doing it due to lack of appreciation.

Continuous development is not possible:

Again, you want your employees to keep on developing on a continuous basis as this is beneficial for both the company as well as their career. When their performance is monitored on a weekly, monthly or even quarterly basis, there is scope for them to identify their strengths and weaknesses and make plans to address each immediately.

With annual reviews, you have a chance of improving only at the end of the year by which time it can get too late. In an age where there is such stiff competition to secure jobs, this can be a huge problem. The company may replace the poor performer but it will have to spend thrice as much to recruit and train a new employee.

Carrying out Performance Appraisals just for the sake of it has been the problem why we get bugged every time we hear about it. We need more dynamic processes wherein there is instant communication and validation wherever required.


While performance appraisal is not necessarily a bad phrase, but the prevalent processes certainly make the performance appraisals unfruitful. What are your pet peeves when it comes to performance appraisal?