If annual appraisals are such a bad idea, why does everyone use them?

There are five primary reasons for the widespread use of annual appraisals:

1. Status quo management loves standardisation, efficiency and compartmentalisation; the annual appraisal is a classic representation of that.

2. Status quo assumes that it’s the organisation’s role to motivate, monitor and control the employee: the annual appraisal looks to achieve all those things.

3. Remuneration decisions are (commonly) tied to the outcome of appraisals

4. Performance management forms a large part of traditional Human Resource practice, so to challenge that would beg the existential question: what is the role of HR? And to tackle this requires an HR Director willing to pursue the challenge.

5. The status quo tends towards the preservation of the norm; people either don’t think to question it, or they are hesitant to innovate away from the crowd.


It’s important to point out that the sorts of people that make good HR Directors (those with a passion for people and culture) are as valuable (if not more so) than the CFO, and can be a driving force for positive change rather than a hindrance. So, don’t mistake this commentary as a position against HR - quite the opposite. It’s just that, unfortunately, the worldview and scenario they have inherited works against them.

The fact that everyone uses annual appraisals and have done so for a while is simply not a good reason to continue using them. After all, annual appraisals are almost universally disliked: not exactly the hallmark of a valuable idea!