In my estimation, appraisal systems built on "ranking" are ineffective and a drain on resources, as well as lowering morale. All of these things detract from instead of enhancing organizational development, productivity, and efficiency.
Appraisals should be used to identify areas of personal/professional growth which contribute to the organization's continued growth, or as Toyota says, "Moving forward".
A ranking system is ineffective because the top performer one year may be the bottom performer the next. In addition, since most companies tend to "downsize" the lower levels, replacing them with unknowns (or in some cases younger, cheaper employees), the older, more expensive employees, who by the way have extensive product knowledge, customer rapport, and 'best practice' experience, are relegated over time to the lower levels, in preparation of termination. Ranking is costly and in some cases economically unfeasible.
Ranking is also a drain on resources since supervisors, managers, department heads, who are the ones conducting such reviews, usually agonize over the process. Posturing to provide the appropriate personnel to be selected for the top spots and arranging for others to be relegated to the bottom. It is stressful for both the appraiser and the appraisee, who must remember, devise, develop a defense or explanation as to his/her performance over the past year. Where such a defense is lacking, where performance has been impacted by outside forces beyond the employee's control, where the employee did not have the appropriate tools/support to complete the task, or where goals/priorities have changed, the employee starts on the slippery slope to the lower rungs.
Appraisal rankings, finally, are a morale buster instead of being a morale booster. By sheer historical facts, employees realize that sooner or later, due to rising to the highest level of compensation, no promotional opportunities, incompetence, age, appraiser bias, or other factors, one is targeted for replacement at the whim of the company and the appraisal system.
That's why I've always been a proponent of a performance management system which encourages resourcefulness, adaptability, personal and professional growth, in a word, ownership of the goals and direction of the company, rather than a cold, calculating, and capricious appraisal system.
Just my thoughts,
PALADIN
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