Last week, one of my friends called me up to inform about his performance in the annual appraisal conducted in his organisation. Right from his voice, I was able to gauge that he was very pissed off and disappointed. At the end of our conversation, he even mentioned that he will be leaving his present organisation very shortly and has even started the search for a new cubicle to work. After we hung up, I went to bed. But the thought of my friend’s annual appraisal process kept making rounds in my mind and I was thinking why was he moving on to another organisation. During several of our earlier conversations, this friend of mine has informed me how good his present organisation was, why he was happy and the same time lucky working there, how he felt that he was performing up to the standards; he is meeting all the expectations of the person to whom he reports. So, then what happened suddenly? Why this sudden thought of moving on? Is it just the appraisal process which is responsible for this decision of his?
All the management books that I have come across till now have stressed the importance of annual appraisals for an employee – tips on how an employee can perform well in an appraisal, DOs and DONTs of appraisals, etc. But I have never heard of a book on why annual appraisals are important for an employer? (if you have comes across any such books, pardon my ignorance and leave the name of the book in the comments section). What role do appraisals play in maintaining a happy-people-organisation?
IMO, people are not happy with appraisals only on account of the following two reasons:
- They believe that their performance didn’t get the recognition that they deserve based on the efforts they have put in,
- their performance didn’t get the correct recognition vis-a-vis their peers who work in the same cadre.
I will not get in to what is right or wrong of the above two; in which category my disgruntled friend comes in to? Whether he is right or wrong? The only thing that I want to talk about today is how important appraisals are for an organisation. Primarily, following are the 3 incentives related to an appraisal:
- Moving up the hierarchy (vertical growth)
- Hike in pay structure
- Performance bonus
Now, if an employee who has been appraised feels that he didn’t get any of the above mentioned things in the right proportion as he deserves because his performance was not rated well, a feeling of disappointment and frustration creeps in to his mind. He gets disappointed and stressed-out with his work very quickly. His productivity graph nose-dives and he longer feels like working for that organisation. In order to escape this feeling, he decides to move on to another organisation. And what about the employer? It’s about to lose an important resource. I firmly believe this is what happened with my friend too. And knowing him very closely, I can vouch for the fact that his present organisation will surely lose a critical asset.
In a nutshell, this is what an organisations should ensure during the appraisal process:
- An appraisal should be done diligently and not just as a formality or usual activity.
- After an appraisal of an employee and before disclosing his/her ratings, a horizontal review of appraisal ratings of other employees in the same cadre should be done.
- Post an appraisal, an appraiser should sit with the employee and discuss what the employee was expecting and whether his/her expectations are met. If yes, the appraiser deserves a pat and if not, he should address the concerns of the employee.