Appraisal of what exactly?

In many of our client engagements, when the subject of performance management comes up, the conversation quickly narrows to appraisals – ratings, scores, and the familiar end-of-year ritual that often leaves managers and employees frustrated. Then, they want the quick fix of training for line managers on how to conduct appraisals without paying attention to the broader system that drives its effectiveness.

This focus, however, is a misnomer. Appraisal is only one part of a much broader system of performance management. When organisations reduce performance management to ratings and reviews, they miss the real opportunity – to build a system that drives results, shapes behaviour, and enables continuous improvement.

“The cycle begins with performance planning, and this is where performance is often won or lost. Many organisations still develop KPIs from job descriptions or business-as-usual activities, rather than from strategy.”

In practice and in research, high-performing organisations treat performance management as a cycle, not an event, one that moves from planning to enablement, tracking, review, decision-making, and ultimately improvement.

The cycle begins with performance planning, and this is where performance is often won or lost. Many organisations still develop KPIs from job descriptions or business-as-usual activities, rather than from strategy. The result is predictable: employees work hard, but not necessarily in the direction of strategic priorities.

More effective systems align individual scorecards directly to strategy. At Stanbic IBTC, where I worked previously as the Head of HR Business Partners, this was taken a step further through what we described in a Harvard Business School case study in 2011 as ‘performance contracting clinics’ – structured sessions where managers and employees jointly translated strategic objectives into clear, measurable commitments. These clinics did more than produce KPIs; they built clarity, alignment, and ownership from the outset.

Planning alone, however, is insufficient without enablement. Once expectations are defined, organisations must ensure that employees have the capability, tools, and support to deliver. This is where performance management connects directly with learning and development.

Competency-based development planning ensures that individuals build the skills required for their roles, while a culture of personal development reinforces continuous growth.

Research consistently shows that performance is a function not just of effort, but of capability.

Without the right skills, systems, and resources, accountability becomes unfair and ineffective.

The third stage is performance tracking. Dashboards, scorecards, and monthly or quarterly performance reviews (MPRs and QPRs) are now common. Yet in many organisations, these sessions resemble “trial courts”. Managers are either praised for meeting targets or criticised for missing them. What is often missing is performance consulting – using data to diagnose issues, understand root causes, and identify solutions. Measurement should guide action, not just judgement. When tracking is used well, it becomes a tool for insight, not intimidation. These sessions should be driven by creative problem-solving techniques and approaches.

This leads to a performance review, the stage most organisations are familiar with. Yet even here, there is a need to rethink the purpose of appraisal. Too often, reviews are subjective, influenced by perception or recent events.

Evidence-based performance management offers a better approach. When objectives and metrics are clearly defined, the numbers already provide a clear picture of performance. The role of the review should therefore shift from judging to coaching. As research by Angelo DeNisi and Robert Pritchard shows, performance management serves both evaluative and developmental purposes – but organisations often overemphasise the former. Effective reviews focus on reinforcing strengths and identifying areas for growth.

From review, the cycle moves into performance decisions, and this is where performance management becomes real. Decisions around rewards, promotions, role assignments, and even exits send powerful signals across the organisation. Employees pay close attention not just to what is measured but also to what is acted upon. If high performance is not recognised, or poor performance carries no consequences, the system loses credibility. The language of ‘They said you got a D” needs to change to “Your results reflect the D grade you have received”.

The final stage is performance improvement and innovation, and this is where many systems fall short. Performance management is often used to evaluate outcomes, but not to improve them. Yet its real value lies in learning. The ADKAR change management model, which focuses on awareness, desire, knowledge, ability, and reinforcement, provides a useful framework for supporting individual and organisational change towards improved performance. Improvement is not automatic; it must be managed. In addition, tools such as 360-degree feedback can help individuals understand how their behaviours affect others, enabling targeted development that drives better results.

Taken together, these stages form a coherent system: planning, enablement, tracking, review, decision-making, and improvement. Each stage reinforces the others, and weakness in any one stage can undermine the entire system. The key insight is simple but often overlooked: performance management is not about appraisals. It is about creating a system that aligns strategy with behaviour, supports people to perform, uses data to drive insight, makes decisions that reinforce priorities, and continuously improves outcomes.

Organisations that understand this move beyond the annual ritual of appraisal and build performance systems that truly drive results.

They also invest in continuously assessing the efficacy of their performance management systems. Those that do not will continue to measure performance without necessarily improving it and assume that the solution to an effective system lies in training managers to appraise better.

Omagbitse Barrow is the chief executive of Efiko Management Consulting, and his firm supports organisations and leaders to translate their strategy to results.