Some managers and organizations do not feel performance appraisals are useful. In fact, for many companies they may not be. It is really up to the organization and its management team to ensure the usefulness of the performance appraisal system.

The most important question to ask yourself is “do the managers and employees understand the system?” If not, the review will be a waste of everyone’s time. Secondly, you need to make sure you are applying objective feedback for each employee. If a manager is telling an employee they have good customer service skills, but that is not an important part of their job…or it is important but the organization has no objective way of measuring what “good” performance is, then the appraisal may be less than helpful. We must make sure that the areas of performance we are measuring are the most important aspects of the employee’s job.

Effective performance appraisals can improve employee morale, by helping employees see how what they do every day leads to the success of the organization as a whole. They can also protect the organization from a discrimination or wrongful termination suit.

The following is a list of questions each organization should ask when creating or updating a performance appraisal system:

1. How often and/ or what time of the year will employees be evaluated?
2. What form will be used? Is it different for different job descriptions?
3. Will a development plan be attached (a follow-up for less desirable results?)
4. Who will take part in the process (manager, HR, self evaluation, 360 degree?)
5. Who will have overall responsibility/ administration of the system?
6. Will merit increases be realized based on the results?
7. Will a “chart” help those responsible determine amount of increase based on score? If not, who approves them?
8. When will increases be applied?

Performance appraisals can be very time consuming, but having an effective plan from the start will ensure fewer headaches for everyone involved when the time comes.