There are advantages and disadvantages to using employee performance ratings. We look at the pros and cons and common pitfalls associated with them.
When it comes to performance appraisals, there are definite advantages and disadvantages of using performance ratings. This paper discusses the pros and cons of using ratings and shares common pitfalls that you may want to avoid if you are considering introducing ratings within your organisation or reflecting on the effectiveness.
So, first of all, do you need to introduce performance ratings at all? Well, it depends on what you want the purpose of your performance appraisals to be: are they about increasing employee engagement and talent retention or more about increasing productivity and performance? Perhaps they are seen purely as a mechanism to redistribute reward?
If this is a difficult question or you believe that the common answer to the question; “Why do we carry out performance appraisals here?” would be ‘because HR tell us to’ or that it is just ‘something we’ve always done?’ then it is worth re-defining the purpose of performance appraisals in your organisation from the top down. Answers like the above will result in appraisal being seen as a box-ticking exercise or a painful annual activity that should be complied with and this perception needs addressing culturally.
Ultimately, appraisals should increase productivity AND employee engagement but delivered badly, have the power to do the opposite! Does this mean that we should consider ditching the performance appraisal altogether? Not unless you can be certain that you have a culture of regular, meaningful feedback between manager and employee that goes on all year round. That would be the ideal, but highly unlikely to be a reality in most organisational cultures without some formalised process or check points.
Interested in more about ratings? The following paper may be of interest next to you
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