Bad appraisals cost UK economy over 2 billion

Research from Talent Q, a people assessment company that helps employers recruit and manage talent, has shown that many managers are merely ëgoing through the motionsí when it comes to appraisals. Out of a total UK workforce of 29 million, only 58 per cent of these receive a formal appraisal, of which many are conducted badly and fail to achieve their objective of reviewing performance.

As a result, employeesí productivity and the customer service they deliver is impacted noticeably. Talent Qís research found that good appraisals, followed by effective development planning, were related to 2.7 per cent higher levels of productivity and an 11 per cent increase in quality of service. However, where appraisals are conducted poorly, unsurprisingly these benefits are not achieved. Given the number of bad appraisals, this represents a potential loss to the UK economy of 2.29 billion.

In organisations that take the management of their people seriously, appraisals will often have been well thought out and structured by human resource professionals. However, appraisals are often still implemented poorly for many reasons, including:

Managers viewing appraisal as a ëchoreí rather than a useful activity to manage the performance of their people

Due to a lack of commitment to the process, managers do not implement appraisal thoroughly across all of their people

The objectives of the appraisal not clear or appropriate, either for the company or the employee

Managers not preparing in advance or allowing time for the employee to prepare

Appraisal discussions are one-sided, with the employee unable to contribute their point of view

Managers fudging results either to make themselves look good to their own senior managers, or to ëbe kindí to the employee

Alan Bourne, director of Talent Q, said: ìThereís often a huge sigh from managers when appraisal time comes, however it is actually a well-proven management tool. Research has consistently identified it as a key part of an effective HR system. Many organisations use appraisals badly and our research indicates that those that do so are just wasting time and wonít achieve the intended benefits.

ìAppraisal systems are often well-designed by the HR function but fall down when handed over to be implemented by managers who have not been engaged and donít buy in to the process. A bad appraisal does nothing for morale or productivity, and works against the goals of the organisation.

ìClearly, HR professionals need to work more closely with their operational colleagues to ensure well meaning policies actually get implemented effectively in practice. The simple message to managers is that if you donít know how to appraise effectively, consider the business benefits of doing so and get appropriate training. Doing it badly is a waste of your time and counter-productive within your team.î