Performance Appraisals: Online or Traditional?

Ensuring that formal employee performance reviews take place on a consistent basis is an important part of every human resource manager’s job. Reviews ensure that everyone understands what’s going well, and what needs to change. Transparency helps prevent surprises when promotions, lay-offs, and salary reviews take place.

But human resource management is moving into the digital era. As you transition to more software- and cloud-based management, it makes sense to stop and think about why you’re making the change. What are your goals?

Most HR managers that go digital report that they want to improve efficiency, service delivery, and standardization. Are these goals realistic? Recent studies from Texas A&M University and Cranfield School of Management indicate that, at least when it comes to performance appraisals, they are.

At Texas A&M, researchers compared the reactions of employees who received their PA online to those who received it in paper and pencil form.

 The online group reported that they found this delivery method to increase the evaluators’ accountability to the organization. For example, they were more likely to report that upper management was aware of or played a role in their review. Promoting accountability to upper management is an easy way to ensure that reviews take place in a consistent and standardized manner.

The online employees also felt that they had contributed more to the review process. Increasing employee participation makes PAs more efficient, by reducing the amount of research and writing that the supervisor or HR manager needs to do. Finally, being more involved means staff will report higher satisfaction in their reception of services. People support the things they had a hand in.

Unfortunately, the Texas research group found that many employees report a lower quality of performance appraisal. This may be because of poor software design, or insufficient training in its use. At Cranfield, researchers found that in some organizations the people using HR software were not aware of all of its functions. Others were so uncomfortable with using technology that they found the use of computers for PAs to be a waste of time.

Before you move your HR online, do your research, and make sure that the software you’re getting is well-designed. Ensure your team has the training to learn how to use it, and access to support if they need it. If you don’t launch properly, your digital transition will fail.

Sources: Payne, C. et. al. (2009). Comparison of online and traditional performance appraisal systems. Journal of Managerial Psychology 24:6. 526–544.; Parry, E. & Tyson, S. (2010). Desired goals and actual outcomes of e-HRM. Human Resource Management Journal. doi: 10.1111/j.1748-8583.2010.00149.x .