Why Are Performance Appraisals So Difficult To Do? Ugh. The Dreaded Performance Review Video
In this video, I talk about employee performance appraisals, performance appraisal difficulties, and some possible reasons why performance reviews are difficult to do. Performance appraisals occur when employees are evaluated based on their past performance, usually from peers or superiors in the organization. These performance reviews are then used to provide merit pay or as a means of selection within the organization. In academia, these are called tenure hurdles.
While there are a lot of difficulties to performance appraisals, they are technically helpful for an organization, if performed on a regular basis. Excellent evaluation of employees allows for the maintenance of pay equity, the ability to retain key employees, or to correct the behavior of underperforming employees.
But, here’s the thing and the trouble with performance appraisals. There many difficulties and limitations with performance appraisals that people should think about when they evaluate other people in a company. For example, performance appraisals are usually based on realized performance measures. These performance measures of people's performance can be heavily dependent on outside influences, such as economic downturns. If relying too much on realized objective performance, many people who perform other functions beyond those that contribute to the immediate bottom line will not get rewarded.
Performance appraisals of other difficulties. For example, appraisals can also lead to politicking, even to the degree of the manipulation of performance metrics, within the organization. This is especially true when there are group projects and the definition of those who contributed is difficult to ascribe to specific people. This is also difficult to do if the outcome of particular action occurs long into the future, such as in R&D.
These situations can cause what is called superstitious learning, where because the the outcome is not directly tied to the action, people will credit the simplest explanation (and sometimes incorrect) to the relationship between the action and outcome.
In summary, while performance appraisals, or performance reviews, are helpful for organizations and evaluating the performance of employees, managers should be aware of the various limitations of performing these performance appraisals in their firm.
References:
Levitt, B., J.G. March. 1988. Organizational learning. Annual Review of Sociology. 4 319-343.
Zollo, M. 2009. Superstitious learning with rare strategic decisions: Theory and evidence from corporate acquisitions. Organization Science. 20(5) 894-908.
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As a research professor of entrepreneurship, innovation, and business strategy, I discuss topics, such as behavioral science, strategy, innovation, and entrepreneurship, and apply these to my new peer proofreading and editing platform. Topics include the sharing economy, altruism, investing in technology, and bounded rationality. My favorite videos pertain to incentives, goal setting, and learning from failure to drive behaviors such as weight loss, stopping telemarketers, creating novel technologies, and creating new movements.
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A new platform where you can earn credits by editing other people's documents. Use these credits to have your own work edited. If you do a good enough job, you can convert these credits to money.
The goal of the platform is to get people to 'pay it forward' and help other people out by creating incentives for people to give back.
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