Eliminating Performance Appraisals

Should organizations stop doing performance appraisals? The argument in favor of eliminating them is that they frequently do more damage than good. Among the damage that they do, the least troublesome is wasting time, and the most troublesome is the creating conflicts between employees and their supervisors.

There is no doubt that in many organizations appraisals are poorly done, and that they create a number of problems. However, it is important to point out that they exist because of the need to motivate, direct, and improve the performance of individuals and organizations. Those who advocate eliminating performance appraisals don’t disagree with these needs, but they point out that managers can and do this anyway.

It is hard to argue with the point that “good managers” do what a good performance appraisal is supposed to do. The fact that they can and do it supports the argument that appraisals can be eliminated, or at least, radically simplified. The “problem” is that many managers do not manage in ways that make performance appraisals unnecessary. Despite this, some companies have declared that they are performance appraisal-free organizations.

Organizations do not have to make a choice between no performance appraisals and everyone having a performance appraisal. An interesting alternative is to require performance appraisals only where they are necessary.     One approach organizations can take to eliminating unnecessary performance appraisals is to focus on identifying those managers who have the motivation, management skills, and behaviours that make their doing formal performance appraisals unnecessary. In essence, this approach identifies managers who are good managers and leaders and, as a result, do not need to do performance appraisals. They can be certified as not needing to do performance appraisals with their direct reports and their part of the organization can be declared performance appraisal-free.

One needed feature of an appraisal-free approach is a training course for employees about what they should expect from their manager given that there will be no formal performance appraisal. Unfortunately, in most organizations today, employees are not even trained in how they should behave in the performance appraisal. This is one of the many reasons why they are not particularly effective in most organizations.

Of course, even the best performance management system cannot make all managers effective at setting goals, coaching, and giving feedback. The answer for them is not eliminating the appraisal system; it is eliminating them.