Why do most performance-appraisal systems fail?

It has been observed over the years that performance appraisals through rating scale techniques are not free from faults. Employees view the rating sheet approach as being neither rational nor objective.

They want to know what the outcome of the results are. Where is the action plan for implementing the performance feedback? Whether for training or monetary rewards, something should be practised and executed. Forms, procedures, rating scales a5re not important.

Processes and involvement are vital. So do not be serious and spend your time on designing forms or calling a consultant to do the simple and practical jobs that are known to you in your routine role.

The reason staff hate the appraisal system is simple - it is not associated with consensus and consultation. They are not working in a military organisation to respect the command of the superiors.

Every individual has pride in being a part of the organisation and believes firmly there should be mutual trust and confidence. It is a participative process. Besides the need for respecting human values, companies must focus on productivity and become more performance-oriented. Managers must work harder to evaluate their staff and remove the communication barriers.

Unfortunately, job titles and reporting relationships dominate. The process must be to assess the performance of the individual and regard him/her as one of the contributors to organisational growth. Effective performance appraisal depends, in many ways, on an open and honest communication established among employees.

Such openness and honesty are encouraged by careful supervision, mutual respect and trust.
There should be a strong and dedicated HR team along with involvement by all employees for the appraisal system to work.

Why are performance-appraisal systems often doomed to failure in family-run companies in the Gulf? HR is often there as a namesake. These companies are having narrow-minded approaches and do not have a clear definition of job responsibility. Most owners are uncomfortable with delegating. You cannot expect performance excellence as accountability is diffused.

The point is that until you delegate, your staff cannot set goals. If your staff is not able to even set a realistic goal, how can you objectively measure performance? How can you find potential and analyse the competency gap?

Appraisals should be continuous and should have at least three stages during a year:
1. Goal/objective/target setting - identification of key performance/result areas.
2. Compulsory mid-year review.
3. Goal review in November to March.

While reviewing, it is not enough to judge a person just by the results achieved. We must take into account other factors - the manner in which the targets were achieved, individual or team effort and how far the results will be helpful to the organisation's growth, profitability, cost savings, customer care, etc. There should hence be a combination of qualitative and quantitative assessment.