Evaluating Performance Appraisals

For those on an annual cycle of performance reviews, it’s that time of year – time to start preparing for the new cycle of performance evaluations. Kenexa recently came out with new research on the importance of the appraisal, especially on worker perception of managers and the organization:

“Across the 12 largest economies in the world, about 60 percent of employees report having received an appraisal within the past 12 months. Receiving an evaluation has a significant influence on an employee’s engagement level and views of their immediate manager and organizations. Employees who are given a performance appraisal are more engaged and are more satisfied with their job and the company overall. The research indicates that receiving a performance appraisal has a significant, favorable impact on how employees rate their pride in the organization and their willingness to recommend it as a place to work. Furthermore, those employees who receive a performance appraisal are more likely to say they intend to stay relative to those who have not received a performance appraisal.”

I agree a formal appraisal is important for both the positive feedback and the discussion of areas needing improvement. However, the appraisal process is limited by several factors, not least of which are:

1) Because of their infrequency, appraisals are usually a source of anxiety for both the appraiser and the employee.
2) Standard appraisals primarily offer the viewpoint of one person with no real benchmark beyond the immediate team.
3) Appraisals give an imprecise picture of division performance.

Strategic employee recognition solutions dramatically enhance the appraisal process, overcoming these challenges and the needs so clearly stated in the Kenexa research – the need for feedback and recognition of effort. Strategic recognition encourages peers and managers to frequently and, critically, in a timely way acknowledge efforts and achievements that demonstrate the company values in contribution to company objectives.

These “recognition assessments” and kudos can then be used during the annual performance review as an additional data point on the strengths (John has been recognized repeatedly for innovation) and even weaknesses (but John has been recognized only once for teamwork) as potential areas of improvement. This presents a much more rounded view of an employee’s contributions of which managers may not even be aware. Moreover, since such a strategic recognition program is deployed company-wide, data can be gathered and used to benchmark an individual’s performance and demonstration of values in their work against direct peers, team members, the division and even the company as a whole.

As you prepare for performance appraisal season, how would you evaluate the appraisal process? What would you like to change in approach and outcomes?