If your company has a formal employee appraisal system, do you feel that:
A high rating will boost an employee’s enthusiasm for the organization?
A satisfactory rating will provide a motivating push for better work?
An unsatisfactory rating will provide a motivating push for better work?
The actual answer to all of the above questions is definitely “no.” Studies show that (perhaps contrary to logic) most employees consider their own work performance to be “above average.”
Those judged “above average” by their bosses are merely satisfied, and show no enhanced commitment to their organizations. Those rated “below average” do not become more motivated but rather alienated and demoralized. And those rated “average” or “satisfactory” feel they actually are being unfairly maligned.
This last, and perhaps most surprising, fact was confirmed in a study by Jone L. Pearce and Lyman W. Porter of the University of California, Irvine’s Graduate School of Management. They reported that receipt of a low rating (relative to the employee’s self-appraisal) caused a distinct and significant drop in attitudes toward the organization within two months of the appraisal. This occurred for both management and nonmanagement employees and persisted even a year later.
For you as a working manager, these findings have important implications. You cannot simply use an appraisal system, expect that it will do what it’s supposed to do, and forget it.
To supplement, or perhaps even counteract a formal system, you’ll need to take positive steps to increase employee commitment. The more effort you put into managing your employees‘ work on a day-to-day basis, the fewer the ill effects from a formal appraisal system. Here are some suggestions:
- Present clear work goals. The clearer the goals, the more easily you will be able to evaluate performance accurately. Insome jobs, numerical goals are appropriate (e.g., “process 75 forms a day” or “sell 100 units a month”), but in others you have to set standards more open to judgment (e.g., “courteous customer assistance” or “frequently demonstrates initiative”).
- Make sure you agree on the goals. Check that employees understand what you expect of them. Encourage them to restate goals you have set and to ask questions about any facet of the work they feel unsure about.
- Be consistent. Don’t shift priorities without giving people full and adequate notice. Judge everyone doing similar work by similar standards.
- Communicate a positive attitude—about both your own job and theirs. In the Pearce and Porter study, they found that employees‘ attitudes toward the fairness of the performance appraisal system definitely improved when their managers’ attitudes first became more positive.
- Make evaluation an ongoing process. The more frequently people get feedback on their work, and the more they trust their supervisor’s knowledge of their day-to-day performance, the more they view a formal appraisal as fair and accurate—regardless of the ratings they get.It’s advisable not to wait for that once- or twice-a-year form to fill out. Instead, let people know what you think of their work as they do it.
Observation: Formal performance appraisal systems are most useful as periodic summaries of what you have been saying to people informally all along. Then, they are least likely to be resented and most likely to be believed.
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