Most organisations have some type of employee appraisal or review system and are experiencing the shortcomings of manual Appraisal systems. In talking about Employee Performance Management, the question we are asked most often is “what is the difference between Appraisal systems and Performance Management”
Several studies have been conducted in Australia that indicates that the predominant method of assessing employees in Australia is Appraisal. Professor Alan Nankervis of Curtain University conducted a study of 992 Australian organisations in 2004 (note 1). One of the outcomes was that only 2.4% of organisations reviewed their employees against Objectives, the remaining 97.5 were a mix of some type of appraisal.
Note 1: Performance Management: A seven Country Study, Alan Nankervis, Curtain University, 2004.
In our view, Appraisal adds little value to the performance of an organisation and in some situations may actually be detrimental to organisations who wish to move towards Performance Management. This is because line managers who have been conducting Appraisals have also seen little if any impact on departmental or team performance as a consequence of conducting these appraisals. It must however be pointed out that even if appraisals don’t contribute to organisational performance, there is a contribution to employee satisfaction because they are at least reviewed as opposed to no review at all.
Appraisal systems were the precursor to today’s Performance Management. Appraisal systems are:
Annual appraisals or reviews are viewed by the staff and management as a difficult and painful process. The annual appraisal is usually:
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