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)