1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.

Performance Management Is NOT an Annual Appraisal

Performance Management: A Whole Different Focus


Performance Management Is NOT an Annual Appraisal

Performance Management Encourages Employee Growth and Development

Joshua Hodge Photography

Performance appraisals are a hot topic in management and organizations these days. In fact, hundreds of resources exist to tell you how to do performance reviews. I think this is the wrong approach. Should you do reviews at all? People want to know how to do them, when to do them, whether to do them, and how they affect performance. The employees who are the targets of these assessments want to know:

  • how they affect income,
  • what they assess,
  • how they measure contribution,
  • how they are archived and used, and
  • how they affect career advancement and success.

I am convinced that most of these are the wrong questions, especially when they focus narrowly on the performance evaluation instrument and the appraisal meeting with the supervisor. Ask instead, how your entire performance management system supports your desire to create a customer serving, motivated, accountable, reliable, creative, dedicated, and happy workforce. I don’t think the annual performance review helps you achieve these goals. In Performance Appraisals Don't Work, I discussed the downside of performance evaluation as traditionally practiced. Here, I'll review the components of a performance management system, my recommendation for replacing the annual performance review.

As a Human Resources or management professional, one of your major goals is to develop the capacity of your organization and its members to perform; you want to create a high performance organization. You lead company efforts to create a workplace in which people can develop their full potential. An effective performance management system, which line managers lead and own, guarantees you will achieve your goals.

Performance Management: Both a Process and a System

Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization. Many writers and consultants are using the term "performance management" as a substitute for the traditional appraisal system. I’d like to think of the term in this broader work system context.

The goal of performance is to achieve the company mission and vision. Almost no one performs, for the organization, however, if his or her own mission and vision are not accomplished as well.

As Fred Nickols, Senior Consultant with the Distance Learning Company, says, "The blunt truth is that, if they have any work objectives at all, most people set their own. This is the era of knowledge work and the knowledge worker …" Many so-called "bosses" (if that term has any utility at all) are in no position to set work objectives, to monitor their accomplishment, or to supervise their pursuit.

The work, especially at the task level, is in the hands and the heads of the workers. To be sure, a manager could formulate goals and objectives having to do with improvement in work processes and the like, but if these must be left to the workers to realize, who needs the manager? An even better question is "Who needs work objectives?"

An effective performance management system sets new employees up to succeed, so they can help your organization succeed. An effective performance management system provides enough guidance so people understand what is expected of them. It provides enough flexibility and wiggle room so that individual creativity and strengths are nurtured. It provides enough control so that people understand what the organization is trying to accomplish.

Nickols summarizes, "Now, in the era of knowledge work and knowledge workers, where work is information-based and working is a mental activity, work routines are configured by the workers in response to fluid, changing requirements. The task of management in this new world of work is to enable and elicit employee contributions of value to the organization. To continue with a system designed to exact and enforce compliance is folly."

Need more information about a performance management system? Find the components of an effective performance management system.

  1. About.com
  2. Money
  3. Human Resources
  4. HR Management: FAQs/Basics
  5. Human Resources, Employment, and Management Glossary
  6. Glossary - P
  7. Performance Management Is NOT an Annual Appraisal

©2014 About.com. All rights reserved.