Why Annual Performance Appraisal Fails & How to Save Them - Empxtrack

Annual performance appraisals are conducted to evaluate yearly performance standards of employees. Appraisal is the most important milestone in an employee’s journey of achieving work goals. Many organizational objectives are integrated with employee goals as employee appraisal measures productivity, economic performance and profitability in an organization.

Well-structured performance evaluations allow managers to identify top, average & low performers and acknowledge (reward, train and replace) them accordingly. Most of the times, employers only reward one third of the total number of high performers leaving too many employee grievances behind. Missing such a real opportunity to motivate employees becomes the reason for failing appraisal initiatives.

Does annual performance appraisal really helps in employee motivation? There’s no certain answer to this. It is unfortunate that even when an organization follows and implements different performance management practices, it fails to conduct appraisals seamlessly. The increasing rate of employee dissatisfaction and disengagement shows how miserably employee appraisals fall flat in many organizations.

Why Employee Performance Appraisal Fails?


Unstructured Performance Management Process

Setting parameters and defining key performance indicators for a balanced appraisal are extremely important steps. Unfortunately, many organizations fail to execute them. They keep eyes only on key result areas and job responsibilities which result in ineffective appraisal decision-making. Also, absence of 360 degree feedback lowers the accuracy of appraisal outcomes.

Unfair Manager’s Favoritism towards Few Employees in the Team

Employees expect fair appraisal process which should be free from any biased decisions and favoritism. Manager’s partial way of passing personal judgements – without looking at the appraisal reports or finding what yearly goals were and how much the employee has achieved – disappoints employees.

It is a wrong approach, but most of the managers believe in putting forward their personal opinions on the behavior of employees rather than judging their work achievements.

Sounds unfair… isn’t it?

Absence of Reliable Communication Channels

Employees often complain that their managers do not communicate or conduct feedback sessions regarding their productivity and quality of work.

Lack of communication and manager feedback leave gaps between employee-manager relationship and employees are unable to step in the right direction to achieve their career goals. It causes harm to employees as well as the employer.

No Sense of Ownership of Manager

Annual performance appraisals are not easy. It takes too much of efforts to design and implement a perfectly structured employee appraisal system. It should be a joint effort of everyone involved in the process. A non-collaborative approach of HR department and supervisor/ manager to appraise employees makes appraisal ineffective, erroneous and unsuccessful.

Lack of Reward & Training Opportunities

Traditional performance appraisals encourage only top-to-bottom level evaluation system. In such a situation, subordinate feedback and employee self-assessment are given less (or no) importance. As a result, managers are unable to identify performance standard of individual team members and employees are never rewarded or coached during appraisal process.

How to Save Performance Appraisals from Failing?


A successful performance appraisal is the one that helps in employee engagement and satisfies every individual. Though designing & conducting a perfect employee appraisal is a challenging task, but it is not impossible. Using reliable performance management tools make it easier to set goals, share feedback, measure day-to-day performance, identify scope of improvement and retain top talent.

Presence of automated performance appraisal software makes decision making accurate and faster. It also helps to:

  • » Set clear and SMART goals for every individual in the team.
  • » Identify and reward top performers so that they stay motivated.
  • » Provide training opportunities to the average performers and prepare self-development plans.
  • » Prepare top performers for succession planning.
  • » Recognize low performers and replace them with the talented professionals to make a difference in the team productivity.
  • » Lead a transparent appraisal process where employees are completely satisfied and their concerns are escalated & resolved without delays.
  • » Improve employee motivation and engagement by linking their performance with compensation.

What else is needed to engage and develop confidence in employees!!

Well-structured performance appraisals leave strong motivational impact on the workforce. Therefore, every employer should use appraisals as a platform to improve and strengthen employee engagement & retention.

If you are facing too many employee concerns regarding annual performance appraisal, make sure you take help of reliable appraisal tool before it’s too late!

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