Here’s why Performance Appraisals Dont Work

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Performance appraisals have long been considered a cornerstone for evaluating employee contributions and fostering growth. However, a closer look reveals that the traditional approach to performance appraisals may not be as practical as once believed. This comprehensive exploration delves into why performance appraisals often fall short of expectations and propose alternative strategies for a more impactful performance management system.

Performance appraisals have been a staple in the corporate world for decades, serving as a formalised process to assess employee performance, set goals, and provide feedback. Yet, despite their widespread use, many organisations are grappling with the realisation that traditional performance appraisals may yield different results. This blog aims to dissect the reasons behind the inefficacy of performance appraisals and shed light on alternative approaches that can better serve the evolving needs of the modern workplace.

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The Downfall of Traditional Performance Appraisals

Annual Reviews Lack Timeliness:

  • Traditional annual performance reviews often need more timeliness. Waiting a whole year to provide feedback limits the effectiveness of the appraisal process, as employees may not recall specific incidents or projects from months earlier.

Past Performance

  • Many performance appraisals are backwards-looking, concentrating on past performance rather than fostering a forward-looking approach. This emphasis on historical achievements may not align with the dynamic nature of today’s fast-paced work environments.

Stress and Anxiety for Employees:

  • The anticipation of an annual performance appraisal can create stress and anxiety among employees. This emotional burden may hinder their performance and the development of a positive, collaborative work environment.

Overemphasis on Quantitative Metrics:

  • Traditional appraisals rely heavily on quantitative metrics, neglecting the qualitative aspects of an employee’s contributions. This approach can lead to an incomplete and potentially inaccurate assessment of an individual’s performance.

Inadequate Feedback for Growth:

  • The primary purpose of performance appraisals should be employee development. However, the infrequency and formalised structure of traditional assessments often result in insufficient feedback, hindering employees’ opportunities for growth.

Alternative Approaches 

Embrace a culture of continuous feedback rather than relying on annual reviews. Regular check-ins between managers and employees provide timely insights, fostering a more dynamic and responsive performance management system. Shift the focus from evaluating past performance to setting and achieving future-oriented goals. Goal-oriented performance management aligns employees with the organisation’s objectives and encourages ongoing development.

Incorporate a 360-degree feedback mechanism that includes insights from peers, subordinates, and other stakeholders. This holistic approach provides a more comprehensive and accurate evaluation of an employee’s contributions and areas for improvement.

Position performance management as a tool for employee development rather than mere evaluation. Provide resources and opportunities for skill development, coaching, and mentorship to empower employees in their professional journeys. Implement recognition and rewards programs to acknowledge outstanding contributions in real time. Celebrating achievements promptly reinforces positive behaviour and motivates employees to continue excelling.

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Continuous Feedback

Organisations’ traditional performance review systems need continuous feedback, check-ins, and goal-tracking features, making them inept at conducting a fair and accurate review. With the changing demands of businesses, customer personalization, and changes in working setups, such systems have become even more incompetent. The only solution for organizations is to switch to a progressive and continuous performance management system.

Engagedly’s powerful and employee-centric performance management system allows real-time evaluation of employees and offers actionable insights to managers to develop their workforce. Its other useful features, such as 360-degree feedback, OKRs, and learning and development, aid employees’ overall growth and development. Additionally, it helps in conducting quick surveys to understand the pulse of employees and offers interactive dashboards for rapid interpretation of data.


The traditional model of performance appraisals is facing growing scrutiny in today’s evolving work landscape. Organisations seeking to cultivate a thriving and adaptive workforce are exploring alternative approaches like HRXconnect, prioritising continuous feedback, goal-oriented management, and holistic evaluations. By acknowledging the limitations of traditional performance appraisals and embracing innovative strategies, businesses can foster an environment that promotes employee development, engagement, and overall success in the long run.