3 myths that ruin your employee appraisal

The employee appraisal is part of the standard repertoire of good leadership. Regardless of how often the manager invites employees to a meeting, the employee appraisal is essential in order to provide constructive feedback and strengthen cooperation for the coming period. I consider it to be the most important management tool and advocate using it consciously. A good employee appraisal is based on trust, which is not put to the test by good preparation, but optimised in the best case scenario. It provides important insights into the employee’s perspective and is extremely valuable for sustainably improving performance. In this article, I will dispel three myths that prevent your employee appraisals from being successful.

Myth 1: ‘We all get along well, we don’t need structured employee appraisals.’

Let’s start by clarifying what an employee appraisal actually is. Fiege, Muck and Schuler describe it as a conversation between a manager and an employee with a clear goal, a fixed date, a significant time commitment and preparation on both sides [1]. The format is therefore far from being of interest only to people who have a problem with their employees. The myth mentioned here assumes that a conversation would not add any value, as the atmosphere among employees is particularly good. This unconsciously ignores the fact that employee appraisals fulfil many more tasks than simply taking the temperature. I would even go one step further and say that an employee appraisal only works if you understand each other well.

By this, I don’t mean ‘understanding well’ in the sense of simply being in a good mood. In this context, I am talking about trust and what is known as a ‘credit of trust’. Mayer defines trust as the willingness to show vulnerability to another person in the hope that the other side will also value and take my interests into account [2]. This means that you believe in your employees, that they will perform their tasks well and on time, and that is why you delegate important tasks to them, ensure that they receive appropriate development or even grant them a pay rise. And you don’t build this trust in the appraisal alone, but over the 364 days surrounding the annual appraisal.

Building trust is also a very dynamic process that depends heavily on past experiences. These can include disappointments, a lack of transparency or breaches of trust. This is where trust capital comes into play. It is a kind of metaphor for your employees’ willingness to trust you in terms of goodwill, integrity and effectiveness. Goodwill encompasses qualities such as empathy, helpfulness and friendliness. Integrity means honesty, a sense of duty and reliability, while effectiveness defines your ability to get things done – how well do you solve problems? How much self-discipline do you demonstrate? How competent do you consider your employees to be?

The more your employees attribute these skills to you, the more trust they place in you and the more credit they give you, for example in a performance review where you have to express criticism. If this credit is lacking, criticism quickly causes high personal waves and ensures that employees ‘fight back’, resist feedback and the conversation escalates. So don’t be blinded by good vibes and take time for each other. See it as actively building up your trust credit and save it for bad times.

Myth 2: ‘I know my people. I don’t need to prepare.’

When I hear a statement like this, alarm bells start ringing. I don’t want to imply that you don’t know your employees. However, good preparation doesn’t start three hours before the meeting; ideally, it’s a year-round process.

Good preparation is a question of the appreciation and seriousness with which you, as a manager, do your job. In my work as a coach and trainer, I also support companies in industry that are required to conduct regular performance reviews, including employee appraisals, for example, under collective agreements or works agreements. Poor preparation has a particularly rapid impact here. The discussions follow the same pattern everywhere. The manager evaluates the employee. The employee does not understand the evaluation. The manager cannot or will not explain it, and the situation escalates. Good preparation can prevent this.

Make notes throughout the year about your employees’ performance and record which tasks or projects or which behavior you remember positively or negatively. The more detailed your assessment is, the more likely your employees are to understand and accept your feedback. It also gives you the advantage of being able to identify and provide feedback on peaks and troughs in performance much more effectively. So take the time to reflect on your employees’ performance at regular intervals. Don’t overestimate your ability to remember in October how good or bad Ms Maier or Mr Huber’s performance was in January. Even your memory has its limits. So don’t make life difficult for yourself. What’s more, the whole exercise has a special added bonus: you can use the time to reflect on your own performance at the same time.

Myth 3: ‘I only need 15 minutes, then I’m done.’

A good performance review takes time. My experience shows that 60 minutes can be a good guideline, and at the same time, I urge managers to allow themselves some buffer time before and after the meeting, even though schedules are usually tight. When managers tell me that they keep employee appraisals short and sweet, they are leaving potential untapped. A good employee appraisal allows you to discuss many goals and topics. Starting with feedback on performance, you also set goals for the coming period. You address the aspect of cooperation with colleagues and customers and discuss closer and more direct communication and information sharing. And very importantly, you will ideally receive feedback on your leadership skills. These are all important factors that you need to understand in order to have high-performing and healthy employees in your ranks [3]. Short employee appraisals make sense if you operate in an environment where this systematic form of discussion is firmly established several times a year [4]. The majority of companies do this on an annual basis, as a survey by the Federal Ministry of Labour and Social Affairs has shown.

Your main concern in the employee appraisal should be to better understand your counterpart’s perspective. Therefore, you essentially have two major tasks: listening and asking questions. But this is where we come to an interesting ‘potential breaking point’. As a rule, employee appraisals go smoothly. People listen to each other, let each other finish speaking, admit mistakes and promise to do better. Everything runs smoothly. But then there are the cases that cause us stomach ache. Employees who do not immediately give in and want their interests to be taken into account. I often find that the situation where ‘the employee does not understand my concern’ only makes managers more determined to make their points clear. They talk incessantly and forget a buzzword of leadership: you have to meet people where they are. But to do that, you have to be willing to listen and ask the right questions. I always notice this behavior when people’s own values and expectations are unclear or even violated, and the fear of losing control takes over the conversation.

Don’t get me wrong: don’t let people walk all over you! Some people are out to get you. However, if you only talk to each other to communicate your points clearly enough, then that is far from a modern leadership approach [5]. You are training employees who just wait for instructions and no longer use their own heads.

My tip for your employee appraisal: Make sure you let your employees start the review. Ask for their assessment and let them evaluate their own performance. Don’t worry! You can make your points, no matter how far apart you are.

Conclusion

The performance review is a key element of effective employee management and development. By critically examining existing myths surrounding performance reviews and conducting them regularly, consciously and in a structured manner, you as a manager can establish a solid foundation of trust and promote constructive and goal-oriented dialogue.

This is not just about passing on information or giving feedback, but above all about actively involving employees in the dialogue. This process has been proven to have a positive effect on the motivation, commitment and job satisfaction of those involved and contributes significantly to a better working atmosphere.

In addition, the performance review offers you an important opportunity to critically reflect on your own leadership behaviour and communication strategies, recognise potential for improvement and develop this continuously. This regular self-reflection enables the sustainable development of leadership skills and contributes significantly to personal and professional development. Ultimately, everyone involved benefits – employees, managers and the entire company – from an open, appreciative and structured dialogue that forms a solid foundation for long-term business success.

Notes (mostly in German):

Would you like to improve cooperation within your team or your communication skills as a manager? Then visit the website of Michael Zocholl and arrange a consultation. It’s definitely worth it!

[1] Hossiep, R., Zens, J. E. & Berndt, W. (2020). Mitarbeitergespräche: Motivierend, wirksam, nachhaltig (2. Aufl.). Göttingen: Hogrefe
[2] Czernietzki, Charlotte & Westmattelmann, Daniel. (2024). Künstliche Intelligenz in der Personalauswahl – Eine Studie zur Perspektive der Bewerberinnen und Bewerber. zfo – Zeitschrift Führung + Organisation, S. 236-242
[3] Demerouti, Evangelia & Nachreiner, Friedhelm. (2018). Zum Arbeitsanforderungen-Arbeitsressourcen-Modell von Burnout und Arbeitsengagement – Stand der Forschung. Zeitschrift für Arbeitswissenschaft. 1-12. 10.1007//s41449-018-0100-4
[4] Hossiep, Frieg, Land und Anke (2021): Unter vier Augen
[5] Personio: Die Vorteile und Nachteile des autoritären Führungsstils

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