6. Better Alternatives to Performance Appraisal in an Agile Context

The summary in the previous chapter was not very flattering for the annual performance appraisal. In hierarchical worlds, the annual performance appraisal only appears to work, to some degree, for very few benefits, while in agile settings, the traditional annual performance appraisal is largely a complete failure. Criticism of this instrument is nothing new, although various authors have focused on very different aspects. What we are now interested in, however, are the alternatives. Numerous authors who subscribe, at least in part, to the criticism of the annual performance appraisal see no possible alternatives. Well-known management mastermind Edward E. Lawler III hits the nail on the head in one of his blog entries for Forbes, entitled “Performance Appraisals Are Dead, Long Live Performance Management” (Lawler, 2012). He rightly states that talent management without systematic employee evaluation is inconceivable. He also mentions that goals are simply essential when it comes to successfully running any organisation, meaning companies which do not evaluate performance will not cope, whether they like it or not. And that’s why these sorts of instruments will continue to exist in the future. End of story.