Performance appraisal methods can make or break the value of employee evaluations, yet many managers haven’t been empowered to consider whether their appraisal methods are effective or not.

I was speaking at an HR conference recently and I asked a room full of HR professionals if they do performance appraisals in their companies. Just about everyone in the room raised their hands. One person in the front row said, “Of course we do performance appraisals; we are HR professionals!”

Then I asked another question. I asked the group how many of them enjoy the process.

In a room full of HR professionals, there was not one hand raised.

As people looked around, there was a nervous laughter. This same group that owned their performance appraisal methods and had so proudly raised their hands were now admitting that the process was painful. In my experience as an engineer with a decade of manufacturing experience, I can say that painful process indicates a broken process.

I pushed on and asked how many participants think their employees enjoy the process. Again, not a single hand went up. The laughter ceased as the group came to the realization that nobody likes performance appraisals.

Poorly constructed performance appraisal methods often end in little change or communication, hindering any potential for high-performance work practices. In working with multiple companies in multiple industries, I think we know why.

1) Performance appraisal methods often consist of putting on a show.

As a manager, you sit down with your employee and tell him or her that you want to have an open and honest conversation about recent performance. However, you both know that there is potentially a bag of money sitting behind you and the employee will get all, some, or none of it. This does not inspire an open and honest conversation. In fact, it does quite the opposite.

The employee will try to put on a brave face and tell you that everything is just fine. She is trying to demonstrate for you why her high-performance work practices justify the maximum possible raise and even a promotion. She is, through forced circumstance, showing off for you. That is, if she doesn’t believe that her efforts are futile. Some employees are so checked out of the process that they will sit quietly and just let it happen.

The employee isn’t the only one putting on a show. In most organizations, the manager doesn’t really have full control over the size of the raise or the magnitude of a potential promotion. This results in the managers putting on the show of telling their employees that they did what they could to secure raises on their employees’ behalf. High-performing employees hear managers say things like, “if I could, I would give you more.” This is hardly motivating.

People like authenticity; unfortunately, this process inherently lacks because it is tied to money.

The truth is that money is a poor long-term motivator. Unless we are talking about a high powered outside sales team that likes to use the money as a scorecard, the average person just wants to get paid fairly and is motivated internally. Internal motivation is inspired when people work in the right environment where they get to work within their strengths, with some autonomy, toward a common purpose. People need to know why they do what they do, and then they will be more open to a conversation on how they can do it better.

2) Managers don’t know how to develop people.

Managing and developing people is a challenging skill set that requires an understanding of how people are motivated, how they communicate, and how to balance empowerment with accountability. Yet most managers are promoted to their positions because they were good employees. Very few managers receive any formal training on how to lead and motivate people.

We coach managers on a regular basis who are incredibly thirsty for more insight on how to develop their staff. This is one of the reasons that leadership books are so popular—because managers are searching for resources outside of their companies on how to do a better job.

Managers tend to focus too much on the process they are managing rather than on the people who actually run the process. This leads managers to blame people for failures in the process rather than developing better performance appraisal methods that would help employees improve their performance. Many managers struggle with their own management style coming across as either too hard or too soft. This leads to frustration of both the manager and employees and often is the root cause of toxicity.

Training and equipping managers with basic leadership skills is crucial. Management is hard because people are messy and complex. We offer leadership team development and team dynamics workshops that coach your managers in these needed skills.

3) Consider the Once-A-Year management philosophy.

I was giving a presentation to executives of a mid-sized company on how to lead and motivate employees when one executive expressed concern with how much time his managers would need to spend on employee development. He said, “You don’t understand. We have working managers here. They don’t have time to lead and develop their people.”

Many performance appraisal methods are executed during annual discussions with employees, and, unfortunately, many managers look at this as a sign that they should only invest time once a year in really focusing on high-performance work practices and development. This leads to countless employees in the US being surprised by conversations that occur in appraisal or discussion about topics that happened months and possibly years before.

A once-a-year process teaches managers that the role is really about the process and not the people. Business leaders need to understand that the most important job of a manager is to lead and develop people. The most successful organizations know that managers are the champions and shepherds of the organization’s culture.

4) Avoid one-way conversations.

Typical performance appraisal methods involve a lot of manager talking time and very little employee talking time. There is often little to no attention on what the manager and the organization can do to help the employee be more successful.

The reason this is such a problem is because the employee is the person who really has the power over his or her own performance. The employee will need to decide what changes she will make and what new skills she will develop. The employee will be most successful if she owns her own development with guidance and help from the manager.

This requires a two-way conversation with the manager serving as a coach/mentor, giving honest feedback, and guiding the employee to his or her own realizations and conclusions. Occasionally the manager will need to be more authoritarian, but this should happen live, not during the performance review.

Another reality in organizations we work with is that the managers don’t have all the answers. Having open and honest two-way discussions with employees on a regular basis is often an opportunity for managers to develop their own skills on how well they manage and communicate. We often see employees give managers insights on how they can be more effective in communicating and helping their teams; this is a sign of a very healthy relationship.

How Do We Change This?

Unfortunately, most performance appraisal methods are broken. We recommend a separate “Check In” process where managers and employees sit down with each other on a quarterly basis (or more often for new or struggling employees) and have a mutual discussion on how they can work better with each other. We really like the “Do More, Do Less, Stop Doing” conversation. This goes both ways. Employees are trained, just like the managers, to give constructive feedback in a mutual effort to improve communication and effectiveness.

Overhauling your performance appraisal methods will not only improve how people feel about the appraisal process as a whole, but it will also help to support building a high-performance culture based on engagement, focus, and accountability.