Bad appraisals cost the UK economy more than £2 billion, according to a recent report by Talent Q research. The report states that although good appraisals can boost productivity levels and give a boost to quality of service, just 58% of employees received any kind of formal appraisal, and many of these were conducted badly. This results in a loss to the economy of £2.29 billion, says Talent Q.

Annual appraisals are essential to ensure the needs of the employee and employer are being met. If conducted properly they help build a solid sense of relationship between supervisors and subordinates. In a busy office environment the time devoted to the performance review may be the only instance when an employee can communicate with their superior on a one on one basis.

It is argued that a well designed appraisal process ensures not only that employees have a clear understanding of what’s expected from them in the future, but also provides them with honest feedback identifying their strengths and areas for development, which in turn helps increase employee morale and productivity. Performance reviews are also an excellent opportunity for employees to voice any anxieties they may have about their role within the organization. The old adage of ‘getting it off your chest’ holds true here. By taking the time to listen to and discuss these concerns in a reasoned manner, your employees go away with a valuable sense of worth. But does this hold true? Are people sometimes held back from giving employers a true account of their opinions on the basis that it may inhibit their progression within that organisation?

Bad appraisals or avoiding performance issues altogether ultimately decreases morale, decreases the credibility of management and decreases the organization's overall effectiveness. As always your thoughts are most welcome…!