September 2, 2014

13 Performance Appraisals Facts You Need To Know

Disappointing Performance Appraisals Facts

A lot of us professionals have been there before. You’re sitting in a room with your manager and you don’t know what to think. It’s almost as if you’re being re-interviewed for your job. One mistake and it could lead to a bad vibe with you and them throughout your work career.

Performance appraisals, one of the most dreaded tasks that employees (and employers) have to go through .

Here are some facts around annual performance appraisals that will surprise you:

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1. Not Consistent Enough

1/5 think their bosses don’t even think about the appraisal until they’re in the room.

This is one of the downsides of having annual performance reviews. The manager involved probably doesn’t have it in his mind till the day of.

There’s a lot on a manager’s mind (especially if they have a big team), hell, a horrible boss will not really care about his employee’s performance enough to give a legitimate appraisal.

2. Trust Issues?

44% don’t think their boss was honest during the process.

A little less than half of the employees surveyed reviewed that their boss was not honest.

A lot of bosses out there just want to focus on what they believe are more important tasks and will just say things to get the appraisal finished in an expedient fashion.

I’m sure that a manager working for a small or medium enterprise doesn’t necessarily have appraisals on the top of his priorities list.

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3. Are Appraisals Fair?

⅕ felt they had had an unfair appraisal.

I always blame office politics around statistics like this. Whenever there is lack of fairness or lack of trust there could be a bigger picture around the situation.

Unfortunately, it’s the way of the world sometimes.

This is why I believe more frequent feedback is a lot more beneficial to the employee. They will be able to see how attitudes and their performance has changed. Instead of just one performance review.

4. Performance Appraisals A Good Thing?

90% of appraisals are painful and don’t work and they produce an extremely low percentage of top performers.

That’s a very telling statistic right there.

It’s bad enough that an employee is being judged off their work, but it doesn’t necessarily telling the whole story behind the employee’s work. Imagine how it affects your company’s top performers telling them where they failed within the past year and why it didn’t meet a standard.

It’s definitely not a good look. Performance appraisals can be a good thing, but they have to be executed perfectly and have very precise parameters that can be measured.

5. Do They Truly Reflect An Employees Work

45% of HR leaders don’t think annual performance reviews are an accurate appraisal for employees’ work.

HR leaders don’t necessarily think it’s accurate appraisal for an employees work, and I do believe that to be fairly true.

Also, a recency bias is possible. What if  an employee is having a bad couple of weeks and isn’t performing to their highest ability? Are they going to be judged off that?

On the other end of the spectrum, an employee can cheat the system and can be productive a month before the appraisal to make it seem like they’ve done more.

6. Are Employees Rewarded Properly?

42% don’t think employees are rewarded fairly for their job performance.

I’m sure there’s a couple of offices out there that has an underperformer who is rewarded greatly, and an overperformer that isn’t rewarded at all.

Are these appraisals really giving the employees the proper look and allowing them to get rewarded properly?

That’s still up in the air.

That’s why leadership has to be active and actually get to know their employees’ work ethic.

7. Do They Bring Any Value?

Only 8% of companies report that their performance management process drives high levels of value.

Think about that, 8% of companies say that it bring any value at all!

So what’s the point? I personally think that they can be valuable if you improve three things. The frequency, instead of making it an annual employee assessment, make it monthly … weekly if possible.

Create more transparency around the system. Set clear guidelines that show what you’ll be looking for in the employee appraisals. And lastly, don’t make grueling.

We’re working on an employee engagement platform that makes performance appraisals process a lot easier, funner, and simpler.

8. They’re A Waste Of Time

58% of managers said it is not an effective use of time.

Managers have openly admitted that it’s a big waste of time.

If this happens to be the case, performance appraisals are kind of counterproductive. Being that they’re suppose to measure productivity and performance, yet, they’re kind of a timewaster.

We can definitely

9. Quarterly Reviews Better?

4 times more likely to score at the top of Bersin by Deloitte’s Total Performance Index when employees review their personal goals quarterly.

I guess you can say that the theme of the post is definitely encourage more feedback loops to the managers and employees.

All the data that we’ve acquired proves that you can create a better company by simply being there for your colleagues and having more data for both employees and management, by way of performance appraisals, employee surveys, or even just being there more often to chat.

Those things all create more information that will allow your company to grow tenfold.

10. Bad For Staff Engagement

58% of executives believe their current performance process does not drive employee engagement.

As you probably know if you’re a reader of our blog. We care a lot about staff engagement so when we read stats like this, it hits us where it hurts.

In fact, we’re currently pivoting our platform to provide more in detail analytics to appraise employees and give them more positive feedback on their performance in order to boost employee happinness. The more research we do, the more statistics show that the current way of doing things is completely flawed.

So we intend on changing the game with some of the stuff we’re working on.

11. Don’t Improve Development

48% say their performance processes are “weak” in improving development and driving business value.

So the current way that performance appraisal work don’t necessarily develop talent.

There can, however, be a more useful way of developing talent with new tactics or acquiring different data, than what’s been used before. Obtaining data on employee approval or emotion can help managers make decisions that will impact the employees better.

12. They Don’t Increase Employee Performance

30% of performance reviews ended up in decreased employee performance, according to a meta-analysis of 607 studies.

This almost seems counterproductive. A program that’s supposed to appraise employees’ performance doesn’t allow employees to perform better. In fact, it ends up decreasing it.

The appropriate move would be to ask employees what will make them perform better and what can the employer to keep them regularly happy, so they can perhaps change it and make it more fitting for the individual.

13. Raise Retention Rates With Constant Employee Feedback

14.9% lower turnover rates for companies who implement regular feedback.

That’s right, the simplest way to lower employee turnover is to create a work environment that lets encourages regular feedback to managers and employees.

Having a better relationship with your manager can improve employee performance, increase transparency with your employee, and boost your company culture. Thus allowing you to become a great place to work at. So keep the feedback loops strong and create a fun, open environment.

What Are Your Thoughts On Annual Employee Performance Appraisals?

Like them, hate them, indifferent? Let us know your thoughts on twitter @Officevibe.

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