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I was thinking about the process of completing performance appraisals and was battling to answer the questions about whether performance appraisals help an employer, an employee, or may be both. What do performance appraisals really mean? Do they give power to the organization with a sophisticated tool so that at the end they can blame an employee for not doing anything and can save money? Can you imagine what happens if you have different goals from what you have to achieve versus what you been asked to do?  And that is the most ironic part – in the end you are being blamed for not doing what is listed on your performance appraisal as goals.  If this is so, what is the use of performance appraisals if you are just setting yourself up for failure? It more or less reverses the whole “pay for performance” push that’s been going on the last 10 years or so.  It will be interesting to see if it gains any traction!

On the flip side, performance appraisals give you a purpose and aim you toward achieving your goals so you can earn both personal and monetary awards. It really boils down to two things: how well your manger is utilizing the tool in positive direction and how well you have contributed to setting a list of goals that are doable and SMART (Specific, Measurable, Attainable, Realistic and Timely). Always stick to the notion: “Don’t make promises you can’t keep.”  Be realistic; be considerate.

Performance & Pay – Tied?

Tony Hope, a visiting professor from the French business school INSEAD, spoke of rewards at the Institute of Personnel and Development’s Compensation conference. He believes that we need to stop this practice as trust and commitment cannot be fostered while cost-control imperatives dominate organizational thinking. “Just as we have seen that knowledge workers don’t respond to a regime of command and control in management style, so they won’t perform according to pay systems that are individually based,” says Professor Hope. “Organizations must hang on to their best people and these people are exactly those that are least impressed by internal competition within tight budgets… new and powerful forces that are shaping organizations mean that people management professionals are going to have to find ways of collectively rewarding effort. It will be less pay for performance and more pay for participation.”

I think performance appraisals are necessary to foster an employee’s growth.  I agree with Tony Hope when he says, “We need to stop this practice as trust and commitment cannot be fostered while cost-control imperatives dominate organizational thinking.”  I would rather take some other initiatives to cut down cost and keep performance goals and appraisals distinctive to employee growth.  Let’s see what happens in this case when you put the emphasis on employees rather than on the bottom line.

What are your thoughts?

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  1. Michelle Crapo

    I’m a developer (Oops my title has changed to application engineer with some sort of number after it, my job is the same) – so what exactly is my “goal”?  Is it measurable.  A good goal is measurable.  Is there a time line.  Again a good goal has a meaningful timeline.  Is it the number of lines of code I write?  Is it the number of support calls that are generated after my code goes into production?  What about the problems due to bad requirements?  What about missing my timeline when the requirements weren’t ready in time during a project, and my date hasn’t changed?  What about the testers, if my code causes issues, do they get some of the “lower” performance?  Then do I get a “lower” performance rating.There are these ratings – I don’t think any more at my company – but we’ll see.  A, A, B, B, C<br/><br/>A+ means you are doing exceptional work and want to be promoted.  Are being “groomed to be promoted”.<br/><br/>A means you are doing an exceptional job but have no aspirations of going any higher.  Hey I’m a technical person I don’t really want to be a manager.<br/><br/>So who is rewarded better?  The A or the A+?<br/><br/>And around I go again.  In my small mind, they should be rewarded the same.  But that’s just me.  Since I’m not a manager, I have no idea what the true answer is.  Thank goodness.<br/><br/>Hope to hear some more blogs about this.  I wonder how others are tackling the problem.  I would love to hear how you are tackling the problem!<br/><br/>Michelle<br/>

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  2. Julius von dem Bussche
    … but sooner or later the fat lady ($’s) make the last call.

    I generally (and primarily) distinguish between those companies who manage by budget and those who manage by performance.

    If they have at least started to measure performance and realized that the common goal in the financial reports is a result (which has been managed!) and not a goal which has been requested, then folks start thinking differently about their work, and their efficiency, and their “budgets”.

    Managing performance by results with tollerance for investments in skills is IMO a mature model.

    Cheers,
    Julius

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