That’s just not true. What is a performance appraisal? The straightforward answer: A performance appraisal is a formal record of a manger’s opinion of the quality of an employee’s work.

The operant word, of course, is “opinion.”

Writing a performance appraisal requires managers to be fair, unprejudiced, and objective. But the fairness requirement doesn’t mean that you’re restricted only to using quantitative, numerical metrics in making your assessment. Your opinions, feelings, and judgments are what the appraisal process demands.

Managers must make judgments even when—or particularly when—all of the facts are not available. In every other area of managerial activity, the ability to make good decisions in spite of limited and perhaps even conflicting data is what they get paid for. Only in the case of performance appraisal do we feel unnerved about the fact that examples, experience ,and judgment — not quantitative and provable metrics — are used.

Insisting that there must be quantifiable metrics can lead us astray in accurately evaluating performance. For example, how would you evaluate the performance of a translator? The obvious, easy, and wrong answer: the number of documents translated. But while that aspect of performance is easily quantified, it ignores what’s genuinely important—the ability to capture nuance.

The ability to capture nuance isn’t hard to evaluate accurately. Just take a document written in a foreign language and give it to two translators. Then take their two translations to a native speaker and ask, “Which one got it right?” The native speaker will read the two documents and then comfortably say, “This one translates each word accurately. But this one—this one captures what the writer really intended.” That evaluation is certainly objective but there’s nothing quantifiable about it.

If you have access to numerical measures of the quantity of work a person did or if you have some quantitative index of quality to support your evaluation—terrific! Use them. But as long as you can provide solid examples to back up your assessments and ratings, then your appraisal is objective, even if quantitative measures aren’t available.

And despite the myth that objectivity requires metrics, people generally want to know their supervisor’s opinion of their performance. They want honest answers to their most important questions: How am I doing? Are you pleased with my work? Do I have a bright future here? Numbers alone can’t answer those questions.

Don’t get hung up trying to find quantitative metrics to support every judgment in a performance appraisal. Remember what Albert Einstein said: “Not everything that counts can be counted. And not everything that can be counted counts.”

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

It’s not. It’s a bad idea and needs to be stomped out.

Asking an employee to write a self-appraisal creates a false impression of what “performance appraisal” is. When he’s asked to write a self-appraisal, particularly when the company’s appraisal form is used, it’s easy for an employee to assume that the structure of the performance appraisal process is that both the individual and the boss separately write their appraisals of the individual’s performance. They then get together, share each other’s documents, and come to a common agreement on the final appraisal.

That’s wrong. A performance appraisal is a record of a supervisor’s opinion of the quality of an employee’s work. The review meeting is a discussion, not a negotiation. Asking the individual to write a self-appraisal encourages misunderstanding by both parties.

And the misunderstandings don’t stop there. In researching my book How to Be Good at Performance Appraisals, I found study after study that consistently demonstrated that individuals are notoriously inaccurate in assessing their own performance, and the poorer the performer, the higher (and more inaccurate) the self-appraisal. Research by the consulting firm Lominger, Inc. indicates that “the overall correlation between self-ratings and performance was .00. The most accurate rater by far is the immediate boss.”

Further, in their well-known article, “Unskilled and Unaware of It,” Cornell University researchers Justin Kruger and David Dunning report that those who are incompetent performers are also incapable of assessing the difference between good and bad performance. As they put it, “When people are incompetent in the strategies they adopt to achieve success and satisfaction, they suffer a dual burden: Not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to realize it. Instead, they are left with the mistaken impression that they are doing just fine.”

One senior executive describing his company’s experience using a forced-ranking procedure to identify its A, B, and C performers told me of the same problem: “The As are afraid they’ll be considered Bs, the Bs are scared they’ll be seen as Cs, and all the Cs are convinced that they’re A players.”

In August 2007 BusinessWeek surveyed two thousand Americans in middle management positions and above, asking them the question, “Are you one of the top 10% of performers in your company?” Not one of the subgroups in the survey had less than 80 percent of the respondents answer the question affirmatively. Eighty-four percent of all middle managers reported that they were in the top 10 percent of performers in their company. Among executives—the most deluded cluster by far—97 percent of those who were asked whether they were in the top 10 percent group answered yes.

But there’s a better way. If company policy dictates that employees be asked (or ordered) to write self-appraisals, company policy must be followed. But a manager can prevent much of the mischief just described by explaining exactly what the purpose of the self-appraisal is (a way to gain information from the employee’s point of view) and how it will be used (as one of many data sources the supervisor will use to prepare the actual performance appraisal). It’s wise to ask the employee to submit the self-appraisal to the supervisor well in advance of the performance appraisal discussion so that the supervisor can use the data as an input to the official appraisal and not wait until the review meeting to find out what the employee has written. Finally, it helps to refer to the document the employee is preparing as a “self-assessment” while the document produced by the supervisor is the “official performance appraisal.”

A more effective approach is for the supervisor, at the start of performance appraisal season, to ask each direct report to send him an informal list of his or her most important accomplishments and achievements during the appraisal period. The list can be e-mailed or written on a blank piece of paper—there’s no official form. And nothing needs to be said about any problems or shortcomings or improvement needs. The manager’s sole purpose is to make sure that none of the employee’s successes are overlooked. This “good stuff” list will provide the same value as a formal self-appraisal. What’s more? It just may remove some of the stress and negativity felt about the performance appraisal process itself.

About the Author

Dick Grote is a management consultant in Dallas, Texas and the author of the new book, How to Be Good at Performance Appraisals, published by the Harvard Business Review Press in July 2011.

Audit the quality of appraisals, the extent to which the system is being used, and the extent to which the original objectives have been met. Demand 100 per cent uncomplaining compliance with deadlines and requirements. Provide feedback to management, appraisers and appraisees. Train new appraisers as they are appointed to supervisory positions. Actively seek and incorporate suggestions for improvement.

If the results of the performance appraisal are not visibly used in making promotion, compensation, development, transfer, training and termination decisions, people will realize that the whole process is merely an exercise.

About the Author

Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and performance management. His company, Grote Consulting, provides customized services in performance appraisal, performance improvement and talent management.

The program’s purposes and procedures must be explained in advance — enthusiastically — to everyone who will be affected by it. They need to understand that the purpose of performance appraisal is to benefit them.

How does it benefit them? By giving them the answers to the two questions everyone in an organization wants the answers to: (1) What do you expect of me? and (2) How am I doing at meeting your expectations?

45 minutes to an hour is usually sufficient to orient even large groups of employees to the who, what, when, where, why and how of the new system. But if your new performance management procedure requires self-appraisal, or multi-rater feed-back, or upward appraisal, or individual development planning, better plan on providing specific skills training.

About the Author

Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and performance management. His company, Grote Consulting, provides customized services in performance appraisal, performance improvement and talent management.

Performance appraisal requires a multitude of skills — behavioral observation and discrimination, goal-setting, developing people, confronting unacceptable performance, persuading, problem-solving, planning. Unless appraiser training is universal and comprehensive, the program won’t produce much. And be sure to stress the most important requirement of all: the need for courage.

One of the most useful training tools is to give all appraisers a sample of a completed performance appraisal that’s a model of the way you’d like all appraisals to be written. And make sure that the performance described in the sample appraisal is that of an ordinary performer (or even a marginal one), not that of a star.

About the Author

Dick Grote has been a management consultant for almost thirty years, specializing exclusively in the field of employee performance appraisal and management. As a consultant, he has created employee performance management systems for several hundred of the world’s best known and most respected companies, including Texas Instruments, JCPenney, Miller Brewing Company, American Airlines, Macy’s, Raytheon, Burlington Northern Santa Fe Railroad, and Herman Miller. His company, Grote Consulting, specializes in employee performance appraisal, employee performance improvement and talent management.