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My best performance appraisals have been those who focused more on my potential than on my performance.
Like most other things, performance appraisal should be done on an ongoing basis with coaching, feedback and development support provided. The formal assessment should just be a formality with no surprises for either manager or team member.
Having meaningful 1:1's on a weekly basis with your manager helps, as does a manager who takes the time to help you explore growth options you might not have otherwise considered. My entry into the PM field was made possible by a manager who saw something I didn't.
A 360-degree performance appraisal has the best approach because you are evaluated anonymously by different stakeholders, like your managers, co-workers, and your team or subordinates. This evaluation offers the widest view of your performance.
I hate this but I have to do this from long time ago. The only thing that matters in my case is depending on the appraisal I get my annual bonus.
Even i don't like the appraisal process, should be defined by many factors. Appraisal influences by the work you are doing/committed for the specific time. but performance needs to be defined by the capabilities of the individual.
Performance appraisals are probably the most misused tools in the industry. I have been victim and perpetrator and enter them with dread. Typically they are accompanied with guidelines - not so much the process but the results. Many organizations expect the results to fit a Bell curve - 20% high performers, 20% low performers and everybody else in the middle. I am of the opinion that anyone in the low performance category are over-employed or poorly managed and those in the highest category and under-employed. Thus performance appraisals are more a reflection of the management rather than the employee.
Sergio is right, its a tool to divide up the bonus money.
It may appear I am not a fan of formal performance appraisals and you would be right. I much prefer continuous feedback rather than putting things off until the designated date for the performance appraisal event. If there has to be a formal event make it quarterly so one can actually see progress.
Low performers are also candidates for layoffs.
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