Employee performance appraisals that work share some common characteristics. They tell workers how they've performed and can improve — then motivate them to do so. The process generates understanding and commitment, which, together, should result in increased employee productivity.
The link between appraisals and productivity, then, depends on the effectiveness of the appraisals. Yet most of these encounters fall short of expectations.

When managers were surveyed, the vast majority of them felt that their bosses, who had conducted the most recent appraisal of their performance, had given little or no thought to the appraisal process — to all the things that should have happened before, during, and after the appraisal to make it pay off.

In effect, the participants in our survey said one thing consistently: "We're willing to work hard to achieve our objectives, but we're not sure how to go about it." How to go about it is what performance appraisal should teach; in many cases, it evidently fails to do so.

What's the Problem?

To understand what's wrong, it's necessary to acknowledge that performance appraisals are inherently problematic. In fact, there are three intrinsic problems:

• Appraisals are confrontational and stir emotions. All too frequently, appraisals turn into encounters between two "sides." For the staff member, it's "me" versus "them," with "them" getting an opportunity to rake "me" over the coals. For the manager, it's the moment of truth when the worker finds out how he or she "messed up," and that better performance is expected. In this tense atmosphere, everyone forgets that appraisals should educate. Since both participants expect a confrontation, emotions on both "sides" run high. Whatever the emotions, they re-inforce the image of the appraisal as a "necessary evil."