The good, the bad and the ineffective: An appraisal of performance appraisals

This paper is a review of recent literature and industrial examples of performance appraisal practices to explore effective strategies and persistent challenges that are hampering effective implementation of the process. The findings indicated a shift among companies with best practices, from traditional appraisal models to a more dynamic approach that prioritises continuous feedback, employee engagement, and alignment with strategic goals. To illustrate and exemplify these developments, the innovative systems of three global companies were highlighted for their impact on performance and retention. The study also identifies enduring issues that are disabling effective performance appraisals, such as bias, transparency, and resistance to change. In addition, forced or relative ranking was examined which revealed its potential for higher competitiveness and top performer identification, while negatively impacting the workforce through decreased collaboration and affected employee morale. To address these challenges, based on the review conducted, this study proposes strengthening alignment of goal setting and performance monitoring with organisational goals, improving fairness and transparency, incorporating continuous feedback, leveraging technology, and enhancing supervisor training. By leveraging on best practices and addressing the identified gaps, organisations could be on the road to strengthened organisational performance and enhanced employee satisfaction.