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.

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."

  Appraisals are judgmental. Many managers dislike appraising because they're called upon to act as judges and counselors. They dislike both roles. The judge's role requires "distancing," which many managers find discomfiting; the counselor's role requires knowledge and experience that many managers lack.

  Appraisals are complex. Effective performance appraisals are difficult to do. They require a full understanding of the worker's job and of his/her performance. They demand psychological insight and interactive skills. Even the best appraisers rarely say an appraisal is "simple" or "easy."

These three characteristics are intrinsic to appraisal. There are also other reasons why appraisals fail.

The appraisal process itself is often poorly constructed. Problems surface in four ways:

	The hit-or-miss approach. Many managers rarely, if ever, prepare for an appraisal. They "play it by ear."
	Confusion about objectives. Often, managers are confused about what can be accomplished in the appraisal. They don't realize it is more than a recital of shortcomings — it is an opportunity to instruct, to teach workers how to overcome their shortcomings.
	The only-once-a-year outlook. Many managers think of appraisal as something that happens once a year. They should, of course, think of it as something that goes on all year long. Appraisal should be a day-in, day-out activity.
	Overreliance on forms. Many companies carry on a never-ending search for the "perfect" appraisal form, which, when properly filled out, will boost everyone's productivity. This is an exercise in futility. In the end, effective appraisals depend on people, not paper. Forms may help, but they're no substitute for managers who know how to appraise.
	Many managers go into the appraisal with mistaken notions about how they should behave. Three mistakes are common:
	Self-imposed censorship. In an effort to be "kind," some managers censor themselves. They distort or tone down talk of deficient performance. Their intentions are good, but the results aren't. By playing games, they deprive workers of insights that could lead to better performance.
	Disrespect. Few managers would admit they don't respect their staff, but a surprisingly large number behave as if they don't. Either they refuse to take the appraisal seriously ("What difference does it make? This guy will never change."), or they fail to engage the employee in serious discussion ("Why bother? It'll only prolong the ordeal."). The message is: "You're not worth more of an effort."
	Misuse of power. For some managers, an appraisal is a chance to "show who's boss." Starting out with fixed — and usually disparaging — ideas, they devote the appraisal to "laying it on the line." The employee, of course, feels beaten down, resentful — and unmotivated.

Finally, many managers don't have the skills to motivate employees through an appraisal. They:

	Fail to prepare data. Performance appraisal too often degenerates into wheel-spinning because no one ever bothers to collect hard facts. Since neither can document claims, the appraisal becomes a mishmash of impressionistic ramblings and unresolvable disputes.
	Fail to get the worker's views first. It happens with disheartening frequency — the boss speaks first, then asks, "What do you think?"; and the staffer cagily replies, "I go along with that." This is no way to get at the facts.
	Fail to probe. To appraise performance effectively, a manager must know how the employee performed and why. This nearly always requires diligent probing. Many managers don't know how to do this.
	Fail to involve the workers. Many managers think, "What's to discuss? My staff's performance is over and done with. All that's left is to tally the score, and my job in the appraisal is to let them know the score." They may know the score, but that doesn't mean they are planning to improve it. Exclusion and commitment rarely go together.
	Offer unsolicited advice. Most appraisals require the manager to give advice only when it's solicited. But workers usually don't solicit it, so the manager must "guide" the appraisal to the point where the employee asks for advice. Since most managers don't know how to do this, the advice they give often falls on deaf ears.
	Fail to devise goals and action plans. When employees leave an appraisal wondering, "So what?", it may be because they didn't receive improvement goals. Employees should get the answers not only to "How have I been doing?" and "Why?" but also to "How can I improve?" Only goal setting and action planning can answer this third question.

All these problems can be overcome, or at least counterbalanced, if, besides having a workable appraisal system, an organization does three things: makes appraisal a continuing year-round activity; teaches its managers how to appraise year-round; and teaches them how to deal with each worker individually.

"Year-round" appraisal may sound like a misnomer, because appraisal usually is thought of as an annual event. It shouldn't be. Performance appraisal should begin at the start of the year with goal setting, continue with periodic performance reviews, and conclude with the traditional year-end appraisal. Then it begins all over again. We call this the Perform-ance Appraisal Cycle (PAC).

PAC offers some clear-cut advantages. First, it instills the idea that "performance" isn't busywork; it's effort directed toward predetermined objectives. That's why PAC begins with goal setting.

Second, PAC ensures that the worker's progress will be monitored. If progress is slow or nonexistent, corrective action can be taken at once, while it still makes a difference. Without these periodic progress reviews, year-end appraisals are likely to resemble postmortems — too late to do any good.

Many organizations know from firsthand experience that the year-round appraisal cycle works. However, it works only when managers are trained to conduct goal-setting sessions, progress reviews, and appraisals.

In the correct five-step format, managers:

	Explain the purpose of the discussion (to set goals, monitor progress, or appraise performance) and its procedures
	Elicit the worker's ideas and opinions, without saying anything to influence them
	Set forth management's viewpoint
	Discuss and resolve differences
	Devise a plan of action for following through.

This format is what makes PAC go. The five steps ensure that whenever manager and worker meet, they'll engage in real give-and-take. And only real give-and-take is likely to produce both understanding and commitment.

Finally, to make PAC work, a manager must treat each employee as someone distinctive. For example, suppose you have a staff of four; tomorrow, you'll meet with each to set job goals. You know what to expect. The first, strong-willed and impudent, will resist your ideas and push hard for his/her own. The second, passive and insecure, will go along without comment or resistance. The third will buy your ideas only after long-winded comments; and the fourth, confident and straightforward, will accept or reject each idea only after careful analysis. Now, anticipating different behavior from each worker, you'll naturally plan a different strategy for each meeting. You'll follow the five-step format; but in each case, you'll adapt it to that particular employee. (It's a cinch that what will work with the cocky employee won't work with the nervous one.)

Most performance appraisals are less effective than they could be, and the reasons lie both in the nature of appraisal and in the circumstances surrounding it. But problems can be overcome. If appraisal becomes a year-round activity, if each session follows a systematic format, and if each is adapted to the employee's characteristics, improved productivity can be expected to follow. Yet the appraiser must know how to make it happen — for in the end, any performance appraisal system is only as good as the person who conducts the appraisals.

Copyright © 1999, Psychological Associates, All Rights Reserved

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