Fixing the Fatal Flaws of Appraisals - Employee Appraisal Tips

How many managers would consider running a business without a way to accurately measure up to 70% of their budget. Yet, this is exactly what is happening with most business and organizations around the world. Nearly all government organizations and most businesses do not have an objective way to accurately measure staff performance. 

Comp and benefits accounts for up to 70% of the budget..Appraisals are frequently used to evaluate employee performance, determine pay increases, bonuses and support promotion decision. Unfortunately appraisal criteria are usually vague This leads many employees to view them as biased and unfair. It is critical for managers to recognize the importance of performance management and find more accurate and fair ways to measure staff performance. 

The key contributors to appraisal failures include: ill defined rating scales and subjective performance criteria.

’ Poorly Defined Rating Scales. 

‘Prejudice is the child of ignorance. Wooly rating scales are those that rely on the rater’s perceptual to determine staff performance. The underlying problem here is that most managers do not know the difference between an observable behavior and an opinion. Which statements below are observable statements. Behavioral Vs Opinion Execcise

• Sandy liaises with other departments ensuring all customer files are up-to-date.
• Kim followed-up with customer complaints
• Tracy maintains the fork lift.
• Francis keeps the file cabinets organized.

The correct answer can be found at the end of this blog. 

Some managers are hard raters while others are soft. I once had a general manager for a local utility tells me, “No one deserves a five This essentially turned the appraisal’s five point rating scale into a four point rating scale. Not only is this a very biased statement but increases “regression to the mean”. That is to say, the smaller the rating scale the more likely you are to get rating in the middle of the scale.. On a three point rating scale (1 2 3) most people will be rated 2. When the majority of staff are rated “meets objectives” or “average” the more pay increases resemble across-the-board raises. This drives up the cost of pay overall. See my previous blog, Across-The-Board Raises Increase Cost and Reduce Performance for more details. In other words, the larger your rating scale the more differentiated your work force becomes and the flatter your compensation bell curve becomes.

Many appraisals rely on the manager’s perception.. Here s an example. 1. Unacceptable, 2. Developmental,3. Meets Objectives, 4. Exceeds Objectives, 5. Walks – On - Water and 6. Talks With God. Bias results when rating criteria are not applied consistenly, And biased ratings will lead to erroneous decisions. Think about the many ways raters bias can distort well meaning managers.