Are annual performance appraisals still useful?


December 2013

Richard P. Morgan CMC, FIMC

Happy New Year!

Are annual performance appraisals still useful?

The former CEO of Avis, Robert Townsend said that he thought annual reviews “were like whacking your dog once a year to housebreak him. That is an interesting generalization, and I believe it misses the mark.

I agree that some managers do a terrible job when it comes to providing helpful feedback to their reports. In such cases, a blistering tirade once a year only makes things worse. Some also contend that if a manager provides helpful coaching throughout the year, a formal review is unnecessary.

I cannot agree with the “no appraisal” approach from both a managerial and a legal perspective.

The fact is many employees say they feel stress because they never know just where they stand with the boss. That perspective could be due to lack of any real feedback, or due to too many conflicting comments about their performance.

I have found that a useful annual review must start before the year even begins, with the setting of objectives in the key performance areas. The manager and his/her report meet to establish measurable goals. The goals then become the benchmarks of the individual’s performance during the next period.

Periodic discussions during the period then focus on results attained versus the goals established earlier. The boss must base coaching and assistance on objective progress or the lack thereof. Through monthly reports, etc., the employee always knows where he/she stands in relation to specific goals. Poor performance may require probationary action. Formal written reviews, signed by the employee and acknowledging the date of the review, are an essential element to protect the manager and the company from lawsuits for “wrongful discharge.”

Annual reviews should also include mutually agreed developmental actions. Perhaps the employee suggests a technical course at a local college at company expense. The manager may ask the employee to read two books on a current topic to improve general business knowledge. Developmental discussions can be highly motivating for ambitious reports.

Employees who achieve all of the mutually agreed goals will expect rewards and recognition. When performance lags, there is objective cause to reduce or eliminate additional compensation.

Annual performance appraisals, used in conjunction with detailed job descriptions and an equitable compensation plan, can motivate employees to meet and exceed goals. The appraisal focuses both parties on objective measurements of performance rather than subjective judgements more subject to emotion and unsupported selectivity.

In essence, annual performance reviews can be helpful to both management and the employee. Both parties must keep communication lines open during the period, and the focus on measurable results. Bad practices, favoritism, subjective criticism, undocumented warnings, or once-per-year brow beatings should not be part of any company’s appraisal or management system.


“Effective marketing doesn’t take millions. It takes imagination, enthusiasm, and the willingness to experiment and change.”

R.P. Morgan CMC, FIMC


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$ Million Marketing Tips

TIP: To position yourself in the market is not possible; your customers position you in their minds. What you can do is make everything you do a positive influence on their perceptions in the way you want to look to them in the future.

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Smiles make the day!

Random thoughts

I would be unstoppable, if I could just get started.

The quickest way for a parent to get a child’s attention is to sit down and look comfortable.

Gone crazy. Back pretty soon.

I live in my own little world. But, it’s okay…they know me here.

You can’t stay young forever, but you can be immature for the rest of your life!

Forget health food. I’m at an age where I need all the preservatives I can get.

As you age, your secrets are safe with friends. They can’t remember them either!

There comes a moment when you realize that you won’t do anything productive the rest of the day.

How many times should you say “What?” before you just nod and smile because you still didn’t understand a word they said?




P.S. Ninety-three percent of our engagements originate as a referral from helpful people like you! If you know someone who:


> Wants to develop a more productive marketing program, or

> Needs help building and implementing an effective operational business plan, I would appreciate the opportunity to discuss the situation with you.


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The concepts, experience, and insights that you brought to our public warehouse organization literally turned the company around. Now that we have a presence in the marketplace, and a proven method for getting the message out to our prospects, I can see that our growth will be limited only by our own desires.” Jeff Edwards, Edwards Warehouse Company, Dallas, Texas


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©2013 Morgan Marketing Solutions, Inc. All rights reserved. Other distribution permitted with proper attribution.

Richard P. Morgan CMC, FIMC

Morgan Marketing Solutions, Inc.

Galleria Tower Two, Suite 1000

13455 Noel Road, Dallas, TX 75240-6620


Telephone 972.931.7993


Author, Marketing Facets – The Market-focused Guide to Company Analysis


“We work with business owners and CEOs who want profit improvement. Clients say they get 5 to 10 dollars in added net profit for every buck they invest with us. One owner says his return was more than 40 times.”



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