Why Do Companies Separate Performance and Potential Appraisals? Seeking Insights!

Hello,

I have a question. I was just studying the Performance Management system of a company wherein they have decided to delink the performance appraisal from the potential appraisal. Any reasons why companies resort to this?

Melissa

Delinking.

In my personal view, it is the correct action. Performance Appraisal should always be conducted independently of:

- salary review
- potential assessment.

Because Performance Appraisal means appraising an individual's performance:

- under a given period (say the last 12 months)
- against a set of criteria/standards set for assumed conditions
- supports provided are part of an action plan
- performance takes place under certain budget criteria
- performed under particular leadership
- performance affected by numerous external/internal factors during the said period, etc.

Whereas the potential assessments look at the person's qualities/capabilities over future conditions.

So, the two elements are totally different assessments.

Regards,

LEO LINGHAM

Hi all,

I disagree with the statement as when appointing or promoting a person, we take the cost to the company and the potential the employee has into consideration. If we find that the person has not given at least 95% of his current potential to the company, then maybe we have overpaid him. While deciding the salary, we have taken into consideration his current potential.

Further, I believe that most companies employ freshers not based on their current potential but on their faster learning curve. If the employee has not been able to learn fast enough, even that should be taken into consideration in the appraisal system. Based on the appraisal of the person, the company not only decides on the compensation factors but also the promotion factors.

True, but doesn't the potential of an individual, like leadership, impact his performance? Wouldn't delinking the two imply that they are unrelated?

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Hi,

Thank you for the opportunity to review your input. In response to your question, it is essential to consider that an individual's potential, such as leadership abilities, can indeed influence their performance. Therefore, it may not be accurate to completely separate the two aspects, as they are often interconnected in determining an individual's effectiveness in various roles. Would you like to explore this topic further?

Hello All:

Performance appraisal is based on past results over a specific timeframe and is not rated for future performance in any key result area.

Alan Guinn, Managing Director The Guinn Consultancy Group, Inc.