Some "experts" suggest performance appraisal, and its guiding system, performance management should be scrapped, because "it doesn't work". Others suggest automating the process, or continuing to use outmoded rating and ranking systems. None of that works, or at least none of that actually contributes to IMPROVING employee performance. To help you decide if we can help your organization, here is our point-by-point philosophy on Performance Management and its components.

Function and Purpose

• If performance appraisals and overall performance management strategies don't improve both individual and organization performance and effectiveness, it's all wasted effort -- overhead and cost. That's the bottom line.
  
  
• Other purposes usually associated with performance management and employee reviews, such as determining promotions, pay levels and raises and record keeping are considerations, because they are realities of our workplaces, but they should never be the primary focus.
• Performance management has amazing power to positively affect the organization, since done properly, it improves employee engagement, focuses employees on what's important to accomplish, reduces micro management and time spent "fire-fighting" and can be used to manage change and alter organizational culture.
  
  

On What Makes Performance Management and Reviews "Work" and "Not Work"

• Computers and software don't make performance management work. They simply allow going more quickly in the service of accomplishing nothing.
• Managing performance is a core part of any manager's job, because it has incredible power to improve performance, engage employees and improve morale, reduce managerial time spent fire-fighting, and creating common culture. It's important not because of abstract concepts, but because it works, when done correctly.
• As such, while human resources is often involved in the performance management process, it's not their responsibility.
• Bottom line is that effective performance management is a person-to-person process that cannot be "fixed" by better forms, better software, or anything of the sort.
• Performance appraisals in the form of annual reviews cannot work if they are unintegrated into an overall performance management system. In fact, if all you do is evaluate past performance, it's likely you will impede improving future performance.
  
  

On The Discomforts of Employee Reviews and Appraisals

There will always be initial discomfort surrounding performance appraisals, on both sides, because of a number of psychological factors, but discomfort CAN be reduced to almost zero, provided performance appraisal is integrated into an overall approach to managing performance.

In short, the rewards for managing performance are high, and everyone benefits when it's done properly.