Why abolishing performance appraisals is a bad idea

In recent years, newspapers were regularly filled with texts such as, "Abolish the performance review." In this blog, we'll explain why that's a bad idea.

The performance or appraisal interview is often part of a traditional HR interview cycle. The origins of this cycle date back to 1920, so we at Learned thought it was time to take a critical look at the traditional appraisal interview within the performance management cycle. Let's start with the most commonly heard objections from the employee side:

• The performance/assessment interview is seen as a "must".
• The appraisal interview is all about financial reward.
• The appraisal interview is perceived as unfair. Research by Kilian Wawoe (VU, 2017) shows that employees feel that the way appraisals are arrived at is not fair and can only be traced to a small extent to actual performance.
• The appraisal interview does not give attention to the employee's talents. An article by HR Practice (2018) shows that only 15% of employees feel that the interview matches their skills.
• Finally, a whopping 66% of employees report that an annual interview cycle lowers their productivity.

However, the problems go a step further. Management and HR are also dissatisfied with the current method of assessment in the traditional HR cycle:

• 90% of HR managers report that the appraisal interview lacks qualitative information.
• 95% of managers say they are not satisfied with the annual interview cycle.

A manager with a team of 8 employees spends an average of 220 hours per year on the interview cycle.