Performance appraisals impede genuine feedback and there’s no solid evidence that it motivates people or lead to meaningful improvement. In fact it usually produces distorted and unreliable data about the contribution of employees. Consequently, the resulting documentation isn’t useful for staffing decisions and often doesn’t hold up in court. Too often, appraisal destroys human spirit and, in the span of a 30-minute meeting, can transform a vibrant, highly committed employee into a demoralised, indifferent wallflower who reads want ads on the weekend.

More than 90 per cent of appraisal systems are not successful. In large part, appraisals fail because the very notion of rating people clashes with human nature. The overwhelming majority of people view themselves as excellent performers. In fact, 80 per cent see themselves in the top quarter of all performers. Telling them otherwise is deflating, not motivating. People see mediocre ratings as a lack of appreciation. Supervisors realise this, and this is why most are so reluctant to conduct appraisals.

Perhaps the greatest incentive for performance appraisals is their value in determining raises, bonuses and promotions. However, benefits to people who receive greater-than-average-awards are usually short term and have little impact on improving their value in the organisation. More important, these awards are de-motivators to the rest of the organisation.

Changing pay practices

If your organisation has some form of merit pay, it’s absolutely essential that you start with education. It is suggested that there must be initiation of a work team to examine how the current system drives performance.

Interesting work: People will be energised and motivated if they are doing work that feels worthwhile and is interesting to them. Everyone’s interests are different.

Climate of people working together: In so many ways, conventional organisations emphasise the individual—individual goals and appraisals are examples of this. Instead, foster ways for people to work together, to share meaning, and connect with one another. There’s no better time to promote collaboration and working in teams than when you are moving away from appraisals. This "connected" environment is not achieved through team building alone, but requires a fundamental shift in management.

The focus must shift away from blaming individuals for poor outcomes to seeking to understand the causes, systems, and processes that drive performance.

To some, these initiatives toward meaning, interesting work, and collaborative teams may feel like lofty and unrealistic ideals. But, at an increasing rate, these kinds of initiatives are taking hold and radically transforming work, with great business results to boot. As this connection to meaning is strengthened, people are finding greater joy in their work. And motivation abounds.