INFORMAL VS. SYSTEMATIC APPRAISAL

Performance appraisal can occur in two ways, informally or systematically. The informal appraisal is conducted whenever the supervisor feels it necessary. The day-to-day working relationship between a manager and an employee offers an opportunity for the employee’s performance to be judged. This judgment is communicated through conversation on the job, over coffee, or by on-the-spot examination of a particular piece of work. Informal appraisal is especially appropriate when time is an issue. The longer feedback is delayed, the less likely it is to motivate behavior change. Frequent informal feedback to employees can also prevent surprises when the formal evaluation is communicated. However, informal appraisal can become too informal.

A senior executive at a big auto maker so dreaded face-to-face evaluations that he recently delivered one manager’s review while both sat in adjoining stalls in the men’s room. The boss told the startled subordinate: “I haven’t had a chance to give you a performance appraisal this year. Your bonus is going to be 20%. I am really happy with your performance.”

A systematic appraisal is used when the contact between manager and employee is formal, and a system is in place to report managerial impressions and observations on employee performance. Although informal appraisal is useful, it should not take the place of formal appraisal. Even some Chief Executive Officers receive and indeed often want formal appraisal.

APPRAISAL RESPONSIBILITIES

The appraisal process can be quite beneficial to the organization and to the individuals involved if done properly. It also can be the source of a great deal of discontent. The manager does the actual appraising of the employee, using the procedures developed by the HR unit. As the formal system is being developed, the manager usually offers input on how the final system will work. Only rarely does an HR specialist actually rate a manager’s employees.

TIMING OF APPRAISALS

Appraisals typically are conducted once or twice a year, most often annually, near the employee’s anniversary date. For new employees, common timing is to conduct an appraisal 90 days after employment, again at six months, and annually thereafter. “Probationary” or new employees, or those who are new and in a trial period, should be evaluated frequently—perhaps weekly for the first month and monthly thereafter until the end of the introductory period for new employees. After that, annual reviews may be sufficient. Indeed, some argue that performance can be appraised too often.

Some companies in high-technology fields are promising accelerated appraisals— six months instead of a year—so that employees receive more frequent raises. The result for some companies has been a reduction in turnover among these very turnover-prone employees.

A regular time interval is a feature of systematic appraisals that distinguishes them from informal appraisals. Both employees and managers are aware that performance will be reviewed on a regular basis, and they can plan for performance discussions. In addition, informal appraisals should be conducted whenever a manager feels they are desirable.

APPRAISALS AND PAY DISCUSSIONS

Many experts argue that the timing of performance appraisals and pay discussions should be different. The major reason for this view is that employees often focus more on the pay amount than on what they have done well or need to improve. Sometimes managers may manipulate performance appraisal ratings to justify the desired pay treatment for a given individual .