A few days ago Accenture, one of the largest companies in the world, announced that they will be doing away with annual performance reviews, thus joining the small list of major corporations who have abandoned the practice of performance appraisals. This indeed is a big move for Accenture and its employees are extremely joyous about it. Earlier this year in March Deloitte, one of the "big four" professional services firms, also scrapped the performance appraisal system. According to a research, 6% of Fortune 500 companies have got rid of the performance appraisal system.
It can be deduced now that performance appraisal systems are in trouble. They aren't appreciated by anybody and will soon be history. They have more of a negative effect on everybody's performance than a positive one. Everybody dislikes it, from employees to managers. But why; why is it that performance appraisals are disliked by everybody in the industry? Here we listed the top 10 reasons for appraisal failure.
1. Appraiser lacks information concerning an employee’s performance.
2. Standards by which to evaluate an employee’s performance are unclear.
3. Appraiser does not take appraisal seriously.
4. Appraiser is not prepared for the appraisal review with the employee.
5. Appraiser is not honest/sincere during the evaluation.
6. Appraiser lacks appropriate skills.
7. Employee does not receive ongoing performance feedback.
8. Insufficient resources are provided to reward performance.
9. There is ineffective discussion of employee development.
10. Appraiser uses unclear/ambiguous language in the evaluation process.