After doing some research I have come to the conclusion that experts are torn between abolishing performance appraisals and using them to enhance the company.
Studies conducted by the Boston Consulting Group and Hewitt Associates showed that "companies with year-round performance appraisal systems significantly outperformed competitors lacking such systems in financial measure such as return on equity, stockholder return, sales growth and cash flow." (Some Corporate Finance for you Doc!) Jerry Donini of the Washington Business Journal believes that companies should not abandon performance appraisals, and I agree. Rather, they should focus efforts in four areas.
The first is Training... It is important to train everyone on how to give and recieve performance feedback. Supervisors hate to do performance appraisals because they are uncomfortable about giving negative feedback. So it is important to train them on how to deal with the employees emotions.
The second is Goals... It is important to set specific, and mearsurable goals.
This way the feedback can be based on these goals and there outcomes. Goals help to motivate employees; they know right away whether their goals were met or not.
The third is Core Behaviors... Identify to the employees specific competencies they need for the job. Many performance appraisals focus on outcomes alone. It is important to also measure the day to day actions of the employees that result in these outcomes.
The fourth and final is Multisource assessments.... Just as we learned in class, a 360 degree feedback brings in appraisals from everyone around you. These assesments are conceived as more fair and accurate by the people who are being assessed. This kind of feedback also helps with communication between employers and their employees.
Although performance appraisals could be biased in some ways, I still think that they are important to a company. I...