Performance appraisals systems are failing both employers
and staff and having little impact on business performance, according to a
report by the Institute for Employment Studies.
Many systems were conceived when organisations were more
hierarchical, and despite modification still drive pay and promotion decisions.
The report claims that this has questionable relevance in
today’s flatter organisations, where career progression is limited and rewards
are more flexible.
Bespoke systems need to be designed which remain adaptable
to shifts in business strategy and structure, claims IES senior research fellow
and author of the report Marie Strebler.
She said, “Ideally, managers should use the appraisal to
help the employee see how their contribution adds value to the business. Too
often they are rushed discussions where performance ratings are handed out,
where petty lapses in performance are picked upon or where performance-related
pay is awarded.”
The IES advises employers to have clear aims and measurable
success criteria in their performance appraisals, and involve employees in the
system design and implementation.
Seventeen companies, and nearly 1,000 managers, were
involved in the report.
By Mike Broad