Why Annual Performance Appraisals Create Negative Employees? How To Solve It?

Many companies look annual performance appraisal as a medium to update employees the value they added to their task throughout the year. This is mainly a kind of only feedback which employees get from a management all year.

It was in 1950 when performance Rating Act made it mandatory to create annual reviews of employees.  Over the years, companies are depending upon these assessments to evaluate employees to decide their bonuses and increments.

Why employees hate annual reviews?

As the appraisal is based on a rating scale and has no association with the development plan, employees hate this and managers find difficult to retain high-performing talents.  Employees are simply annoyed seeing the negative feedback and that too without the recommended actions of improvement.

Managers simply give a remark “performance problem” and star performer dislikes this. It is but obvious if after waiting for a year, you are told that your performance is not up to the mark, you would be shocked and hopeless by the negative result.  Such feedback can discourage or demotivate employees.

Employees don’t want to be measured in this way and the chances are companies may lose them.  Once a year you are sharing what company thinks about you can make your new generation employees unhappy.

Your annual performance appraisal is driving your workforce away.

Companies are eliminating annual performance appraisals as it intends to provide employees a complete report of their progress once a year.  Looked like anxiety-inducing, reviews most of the time hinder the employee-manager relationship.

Employees have understood that annual performance assessment by their managers often becomes a reason for lack of cooperation. Though for managers also it is not fun as they have to spend time rating employees and often these assessment ends up with discussions, complaints, and dissatisfied employees.

Appraisal shows the annual rating of the workforce and instead of discussing how employees could improve their performance or do better in the future, it increases stress.

Many companies have started doubting the traditional way of performance appraisal. They are focusing on new performance process to encourage continuous discussion and feedback between employees and managers to create value.

Lack of competence: It takes a lot of time to review performances.  CEB in its study has revealed that managers have to work continuously for months and still reviews are not accurate.

Delayed improvement: As appraisals are conducted annually and if feedback is negative then employees can move away in the wrong direction.  Regular feedbacks and goal setting can help in achieving targets.

Continuous feedback to improve performance

When we talk about performance it is a continuous activity.

Many well-known companies like Deloitte, Accenture, Microsoft, and Adobe systems have removed traditional performance appraisal. These organizations believe in creating a culture that inspires individual to improve their skills and help in achieving business goals.

Change in the mindset is necessary to motivate employees and instead of performance management system, companies must focus on performance development process to encourage employees to perform competently. Getting employees in strategic planning is crucial and company needs to move away to involve its workforce in the mission.

Managers must provide feedback to employees on a regular basis so that they are accountable to achieve specific results.  While hiring employees, management teams focus on exceptional skills and do not consider an average or normal person to fill the position.  With this thinking companies can’t move forward.

Companies turning to performance management

Many companies are making constant efforts to involve employees to shape culture and create a win-win situation for them to give their best. Employees these days want to be informed to progress. The demand for timely and meaningful feedback helps in making priorities and updating skills to accomplish company objectives.

Today, more proactive feedback models are required to provide regular feedback and give performance reviews.  The feedback sessions are effective to engaged employees to give high performance. Also, it allows the management and employee to discuss on methods to improve the performance of the team or company.

It empowers the employee to give their best work.  Rather than waiting for annual appraisal, now HR departments are adopting strategies to strengthen the entire employee involvement.  Employees can address their concerns and have a discussion on growth opportunities with their managers.

With the new form, the assessment of the employees’ performance would be more transparent and instead of managers talking about employees the shift is towards talking with employees.  New system encourages the manager to talk with their workforce about their roles, responsibilities, plans, goals and motivating them to work together as a team to utilize their competencies.

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