When Performance Appraisals Go Bad

What do you do when an employee known to be a top performer wants to file a grievance related to the performance appraisal process? Someone who has achieved recognition as an innovator, received a collaboration award and was on the fast track to a leadership role. It is a situation that would raise a red flag to any talent management leader. What could have happened during the performance appraisal process to spark such uncustomary upset? 

Objective vs subjective performance appraisals

In the scenario mentioned above there were two contributing factors. First, the employee had been rated by a manager that they had worked with less than 60 days. Second, the feedback in the review centered predominately around an isolated incident that occurred while the employee was on PTO only two weeks before the review. Sounds like a manager forgot the first rule of performance appraisals: one misdeed should not be the whole of one’s performance appraisal.

No matter how well-defined the intention and objective of a performance appraisal more often than not ends up being subjective. As critical as the performance appraisal process is to an employees growth and development, poor execution of this process (i.e. using it as a punitive measure or measuring performance without adequate data) serves no useful purpose and can cause more harm than good unless turnover is your objective, which is, unfortunately how this story ends.

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Performance Appraisals 101

Performance appraisals should serve at least three useful proposes:

  1. To provide actionable feedback to each employee on their overall performance during a specific period of time.
  2. To highlight performance trends and determine the employee’s potential for growth.
  3. To encourage or identify and resolve behaviors and performance trends to promote peak performance and development.

Primary problems with the performance appraisal system

Time and time again, employees go all year long with little to no feedback, that is, until their annual performance appraisal, which is often tethered to their compensation review. Suddenly judgment is rendered for inadequacies long past vs. recognition for good performance. Is it unreasonable that an employee might receive feedback in the moment or at least quarterly to allow the employee to take corrective action on performance issues that might impact their growth or compensation?

Another common pitfall of performance appraisal is that they focus heavily on character traits that have been ascribed to the employee by their manager or reviewer, i.e. attitude, perceived level of ambition, positivity, personality, etc. While these factors may contribute to performance, often times they become primary measures in assessing an employees standing; and the notion that performance is about output quality, volume, dollar value, and responsiveness is all but forgotten. This can lead to a biased review, which can ultimately result in discrimination issues.

If it aint one thing it’s the manager

Too many new managers do not receive performance appraisal training. We continue to take it for granted that this process is intuitive and that all managers are capable of giving feedback, which is actually an area where most managers are challenged. Feedback can be vague in order not to offend. Managers often artificially rate employees below what is required for a pay increase, to meet budget or to keep employees from being eligible for promotion (as part of that subjective judgment). Others will overrate low performance to avoid coaching or taking necessary disciplinary action. You know who they are.

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Fixing the process, what’s the first step?

Change the paradigm. Try moving not only toward evaluating the employee on what they have done but also on what they are capable of. Performance appraisals should be seen as a way of assessing an individual’s strengths and weaknesses, and then assigning them tasks commensurate with their skills. Try developing a culture where managers are encouraged – if not required – to provide ongoing assessment on their employees. This will enable employees to make the required changes in real-time vs. learning about their shortcomings and failures 12 months later.

Performance appraisals done poorly will most certainly adversely impact engagement, trust, collaboration, and ultimately turnover.


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Picture of William Wiggins

William Wiggins

William has held consulting and strategic HR roles at Mercer Human Resources Consulting, Kaiser Permanente, and Williams-Sonoma. He is an industry leader when it comes to building strong collaborative HR partnerships and leadership teams that focus on staff engagement, retention, career development, and staff recognition programs. William’s training curriculum includes Crucial Conversations, Emotional Intelligence in the Workplace, and EEOC 101.

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