Remembering Why We Really Do Employee Performance Appraisals

The following is a guest article from Sean Conrad of Halogen Software:

In a lot of companies, big and small, annual performance appraisals are largely an administrative task that HR oversees, and managers go through the motions of completing. We tell ourselves that we need to do them in order to fairly compensate our employees or to protect ourselves from lawsuits if we ever need to dismiss an employee because of poor performance.

I think in many ways, we’ve forgotten the real reason for doing performance appraisals: to develop our employees so they can continually improve.

Think about it…

More and more, as technology and instant communications shift the business world, your only true sustainable competitive advantage is your people. So shouldn’t you be doing everything you can to maximize the value of that “asset?” That’s really what performance appraisals should be all about. We should be focused on:

• setting goals that harness the talents and energies of our people and help the organization achieve its goals.
• giving employees concrete feedback on their performance and helping them understand the impact of their behavior.
• discussing career goals and looking for development opportunities that help expand their knowledge, skills and abilities, address any performance gaps, and increase their value to the organization.
• talking about the competencies that are important to the role and the organization, and ways that the employee can develop and exemplify these.

When I step back and look at the list, it strikes me that these are really the fundamentals of good “people management.” While really great managers do these things every day, many good managers often get caught up in the other aspects of their role and forget to put them in practice. That’s why your performance appraisal process is so important – it helps remind managers to focus on the “people management” part of their job, and gives them a formalized forum for doing just that.

Part of the reason that many companies still focus on the more administrative reasons for conducting performance appraisals is that they’re still using a manual, paper-based method. This manual approach typically keeps HR focused on making sure the process is followed, and distributing, tracking, and filing forms, and keeps managers focused on completing the “paperwork.” It also makes it hard for HR to aggregate the data collected through the process and extract any intelligence from it to drive strategic initiatives.

If you take away the administrative burden, it’s easier for everyone to focus on the real purpose – driving employee high performance. HR’s time is freed up so they can work on helping managers with goal setting, coaching, giving feedback, employee development, etc.; Managers can focus on the dialogue with their employees, and on directing, coaching and developing them to enhance their performance.

Your company’s fundamental reason for conducting employee performance appraisals will ultimately impact how you conduct the appraisals, and the value your employees, managers, HR team and company get from them. If your focus is on developing a world-class workforce, you’ll reap the benefits.

Sean Conrad works for Halogen Software, a market leading provider of performance appraisal software. He’s passionate about helping companies adopt talent management best practices so they can better manage and develop their workforce. You can read some of his other posts on the Halogen blog, and you can learn more about talent management best practices at Halogen’s Talent Management Centers of Excellence.