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Staff appraisals are failing in many organisations

Staff appraisals are failing in many organisations

Business performance suffers from poor employee and corporate goal alignment

Many UK organisations are failing to manage employee performance, meaning that they are unable to align employee goals with strategic objectives, according to research by Covalent Software, a provider of corporate management applications.

The research reveals that only just over half of organisations (57 per cent) have all employees completing annual appraisals.  This suggests that the other half fail to see the strategic value in staff performance reviews and, crucially, are unable to align employee and corporate goals for maximum performance.  In addition, promotions and pay rises are often closely linked to annual appraisals and failure to manage this process effectively results in employee dissatisfaction, affecting productivity and staff turnover.

“It’s concerning that so few organisations fully recognise the importance that annual appraisals and employee performance have on their organisation’s success.  For a company to prosper, especially in such an adverse economic climate, it’s vital that employees are engaged with the corporate strategy and their role in delivering it,” says Peter McHugh, CEO and Founder, Covalent Software.  “Annual appraisals facilitate important discussions between managers and employees that the track the progress of the individual and enable their objectives to be integrated into the business plan to formulate a clear path to success.”

The research discovered that less than a third of employees believe that their organisation’s appraisals process is effective at driving employee development to reduce competency gaps, while only 35 per cent feel that their organisation is very effective at assessing competency gaps through appraisals. 

“It has never been more important to identify key competency gaps within your organisation,” continues McHugh.  “Determining critical roles, skill gaps and poor performance is essential for corporate success.  In the current climate, staff resources need to be fully optimised and staff appraisals management is a vital ingredient in ensuring strong corporate performance.”

The research was carried out at HR Software Show 2011 interviewing 119 HR professionals.

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