The facts about performance appraisals

20 per cent of WRHA employees have received performance appraisals in the last two years

Limitations of performance appraisals . . .

The traditional approach to performance management can often lead to:

  • The employee viewing his relationship with the manager as adversarial
  • Less trust, lies, and less straight talk.
  • The employee becoming less happy with the job, and his attitude and work suffering.

Employees become disengaged due to:

  • confusion from subjective biased ratings
  • lack of timely and quality feedback and expectations
  • poor relationship with manager due to lack of connection and power imbalance

Stepanovich, 2013; Mueller-Hanson and Pulakos, 2015; Buckingham and Goodall, 2015

Managers:

  • take an estimated eight hours to complete an average performance appraisal
  • are biased raters despite trying to be objective
  • may not identify issues until the yearly review
  • not able to provide support in a timely manner

Stepanovich, 2013; Mueller-Hanson and Pulakos, 2015; Buckingham and Goodall, 2015

Feedback focused on past performance often:

  • produces defensiveness in the receiver
  • is uncomfortable for the sender
  • reinforces negative self-fulfilling prophecies
  • is denied if seen as inconsistent with one’s self-image
  • even high performers may perform worse after this kind of feedback conversation

Goldsmith, 2002; Mueller-Hanson and Pulakos, 2015

An ineffective performance appraisal system has a high cost:

  • disengaged employees cost of $3,400 for every $10,000 of salary (Gallup)
  • turnover costs 1.5 times the departed employee’s annual salary and benefits (SHRM)
  • estimated costs of performance appraisal for an organization = 8 hours x number of employees x managers’ hourly rate. Example: 8 hours X 28,000 employee X $35= $7,840,000 (Coens and Jenkins, 2002)
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