Making the Grade with Appraisals

6 min read

If businesses had mothers, they would certainly be ashamed to receive this report card: in a new BLR Performance Management survey, 72% of the surveys 1,358 participants gave their employer's performance appraisals a grade of "C" or better. There were more B’s than D’s, and more F’s than A’s.

This is, without a doubt, a worrying statistic, and it really warrants an investigation into how companies across the board could score so low with their employee base. The product of a company can be anything, but its primary resource will always be personnel, and while the people are this unhappy now, imagine what they could do if they felt more confident and prideful in their workplace. So what great pitfalls are employers falling into that are causing such widespread unhappiness? Well, besides conducting annual reviews instead of monitoring performance more actively and frequently, the big three mistakes are:


  1. No Review Follow-Through

  2. Scale Scrunching

  3. Short Term Memory

  So let’s start with the first:

No Review Follow-Through

So the annual review process is already a flawed system, as no vague, ten minute meeting can accurately detail a years worth of effort and output. And ignore for a moment the fact that annual reviews completely miss the opportunity for motivating employees with constant feedback, or their potential to stagnate growth because of nonexistent continuous review, or even the fact that issues that need to be addressed go unnoticed for months because yearly review only happens yearly, as the name may have given away. Ignoring all that, the thing that singular annual reviews lack is follow-through. You go 12 months without input, you miss out on continuous growth opportunities, and wander aimlessly through life to sit for ten minutes in an office and be given vague corrective comments, and then you go back into the workforce dazed and indifferent. Not only does a more consistent review process encourage growth month to month, but it reaffirms and reinforces growth between each review. The little effort annual reviews put in is wasted because so much time passes without further input that any behavioral modification drains away. It creates a workforce which is unmotivated and uninspired, and you can’t afford to have that.

Sale Scrunching

The second, Scale Scrunching, comes from the placement of so many individuals in the mid level performance bracket. This is done purely out of necessity, because there is only so much performance bonus money to go around, and an annual system forces you to segment your workforce accordingly. But this leaves many upper level performers crammed in the middle, and it leaves very little room for growth and movement within this space. That is no way to motivate, but all it takes is a simple plan change to invigorate and inspire growth and performance. By moving to a monthly model, you can increase recognition, get a better sense of who your top performers really are, and motivate them to perform better and continuously improve. This kind of change will inspire the growth and ROI to justify upward momentum and performance rewards, because you have actually given your employees room to breathe.

Short Term Memory

Finally, Short Term Memory is another problem with the annual review process which deals with a certain type of unfairness. Because it is impossible for any manager to recall accurately a years worth of performance in one meeting, they are often forced to rely on the most recent performance to perform their evaluations. This means that whatever the most recent performance, the employee is judged accordingly, and given no chance to improve or adjust if there is an issue to address. The problem with this annual structure is that it does not provide employees with a fair and balanced growth program, and gives them no incentive to adjust performance as they go. Then, performance review time rolls around, and they are punished by the very structure they have been forced to work with. To get their grades back to passing levels, companies need to recognize that employees do not want to be left out in the cold, but brought in to be motivated and improved, so that they can give their best at work, and give better grades come review time.