WORK has its fair share of unpleasant aspects but for many people the appraisal ranks as the most detested exercise of the year – and one of the most pointless. A recent survey commissioned by Investors in People, found a third of employees think appraisals are a waste of time.

The same study found that half the appraised believed their bosses were dishonest during the process, a quarter thought it was a mere box-tick exercise and a fifth thought managers put in no preparation whatsoever before the annual appraisal.

Now a new study by Talent Q, a people-assessment firm, claims poor appraisal is costing the UK economy more than £2 billion a year in lost productivity and poor customer service. Talent Q said appraising managers often “just went through the motions”.

“Many organisations tend to appraise just once a year,” said Alan Bourne, director of Talent Q.

“That means managers get landed with a pile of appraisals like a job lot. It becomes just one more burden for them. It’s far less painful when appraisal is a one-to-one monthly meeting in which progress is discussed and goals set. There are no nasty surprises when you know all year round how you are doing. With more regular meetings, there’s also not that build-up of problems that can make an annual appraisal so uncomfortable.”

It appears employees agree with Bourne. The Investors in People research found a third would prefer more regular feedback, which might explain why 40% report being surprised by what they heard at appraisal.

Bourne wants to see a change in both attitude and practice, insisting that efficient appraisal will improve a company’s bottom line. But he said appraisals would improve only if managers were persuaded of the benefits and trained effectively.

Managers had to be trained in people skills, said Bourne. The people-orientated manager – with a supportive, consultative style who listens to what staff say about management and the environment they work in – is always going to appraise more effectively than the one who is task-orientated and more focused on ticking those boxes.

According to Akber Pandor, head of leadership development with KPMG, the professional-services firm, one of the problems with appraisal is that managers often don’t think they need any special training for it.

Pandor discovered this when he started running appraisal workshops for KPMG and struggled to persuade managers to come along to them. His solu-tion? He asked the appraised for feedback on the appraising managers – and that feedback was pretty frank. “Managers realised right away that training was a good idea,” said Pandor.

Pandor agrees that British workers are often negative about appraisal. He thinks this is a shame because appraisal should be all about development of the employee and the setting of specific and measurable goals that are then discussed at interim as well as annual reviews. It ought to be a constructive process.

“People should feel really good after appraisal,” said Pandor. “There ought to be preparation on both sides beforehand. The person being appraised should self-assess and prepare a list of their positive and negatives. Managers should never go in armed with just their gut feeling. What is discussed needs to be backed up by evidence.”

Pandor said managers should focus on what could be changed and not be picky. “If the pain is greater than the gain, I would say don’t bother,” he said pragmatically. “And always make sure bad news comes with good news.”

While fear does not figure high in the reasons people give for disliking appraisal, concern about what a bad appraisal will mean for a career must surely lurk just beneath the surface.

The fear factor is a moot issue given that the Investors in People research showed that a fifth of people felt they had had an unfair appraisal.

Some appraisal systems can have pretty tough consequences. Jack Welch, retired chief executive of General Electric, famously operated a one-to-five appraisal rating scale. While the ones were rewarded with stock options and other perks, Welch was pretty dismissive about the fives. “We don’t want to see these people again,” he said.

The appraisal process at KPMG is markedly more supportive, but the firm also has a ratings system, dividing staff into exceptional performers, strong performers, and those who need development (about 7% of staff a year) or redeployment. Underperformers receive support and training to improve and turn their appraisal round.

Pandor argues that firms should be scrupulously honest with people about their performance. “One of the company values is open and honest communication and I believe people should have all the information,” he said. “For example, we have an emerging leaders programme at KPMG that involves 10% of our people. The argument that is sometimes made is what about the good performers not selected for the programme – won’t it make them leave? But my point is that you tell people who didn’t make it why that was and what they have to do to be included next time.”

Of course, the fairness of such a process relies on what happens after appraisal. In KPMG’s case, there is training and support. But in many other companies a bad appraisal is never followed up. In such cases, all that’s left is bad feeling with nowhere to go – not very good for business.

Olwyn Burgess, client-serv-ices director of the HR consul-tancy Chiumento, agreed with Pandor that honest feedback was crucial and said there was too little of it around.

Burgess, Pandor and Bourne all believed that feedback should be a two-way process and should go up as well as down. In most big companies, 360-degree appraisal – where an individual’s line manager, peers, subordinates and customers are all asked for feedback – is the norm. The theory is that this gives a more rounded picture, and everyone, including the manager and the managed, is appraised.

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