No matter whom you ask in whatever industry at whatever level in the organization, almost no one is fond of their company's current appraisal system. Why is that?

• Have most companies managed to construct ineffectual performance appraisal systems? In part.
• Have some companies managed to put together a performance appraisal form that is too long or doesn't enable the manager to accurately capture the employee's performance? Maybe.
• Do we need to change to a pass/fail system that allows us to have a candid conversation about performance? Doubtful.
• Is the problem that we have a scale with three ratings when we need a scale with five ratings? No. Regardless of the number of ratings on the scale, most people typically use only three ratings — and then they usually stick to the high end of the rating scale.
• Do most managers honestly believe their employees always deliver the highest performance (like Lake Woebegone where everyone is above average)? No.

The problem with most performance appraisal systems is not the tool itself. It typically boils down to a lack of managerial courage. That is, the willingness and ability of a manager to take the time to give an accurate and candid appraisal of an employee's performance. What can a manager do during the year that will make the "appraisal event" less onerous?

The whole process should begin with setting objectives. Effective objectives are smart; that is,

• Specific
• Measurable
• Achievable
• Realistic, and
• Time Phased

No doubt about it, this is hard work! Too many managers give objective setting too little attention until it's time to do the appraisal. Then they wonder why it's difficult to be candid concerning an employee's performance. If performance targets are not established early on, a candid assessment is doubtful.

Once you get past objective setting, the next conversation should not be during the annual performance review. In the best of all worlds, a manager will sit down with each employee on a quarterly basis and talk about how s/he thinks they are tracking against their objectives; comparing that to how the employee thinks s/he is doing. The purpose of the quarterly conversation is not to be evaluative, but instead to be developmental. Evaluation occurs at the point of the annual review.

The quarterly conversations provide a vehicle for boss and employee to ensure they are on track and seeing progress toward objectives in a similar way. If however, there are no mid-course conversations, then there can be no mid-course corrections, producing a greater likelihood that either the manager or employee will be surprised with the other's perception of performance when evaluation occurs in the annual appraisal.

Which takes us back to where we began. It's not about needing a new performance appraisal form or process. Performance appraisal forms or processes work or don't work based upon how effective the manger is in delivering an accurate, candid appraisal of performance. An accurate, candid appraisal is enhanced by SMART objectives that are reinforced by quarterly conversations to confirm that performance is on track. Performance appraisal can be effective even if the form and the process are flawed. It all depends on the manager demonstrating managerial courage.