Poorly conducted appraisals could be costing British industry more than £2 billion every year, according to new research.
In a survey of thousands of individuals and corporations, people assessment experts Talent Q found that only 58% of the UK workforce receives a formal appraisal and many of these are badly structured and ineffective.
Talent Q found that good appraisals resulted in a 2.7% increase in productivity and an 11% rise in good service.
However, given the number of bad appraisals conducted, which have no beneficial consequences and could actively retard productivity, businesses stand to lose billions.
Alan Bourne, director of Talent Q, said: “There’s often a huge sigh from managers when appraisal time comes around.
"However, it is actually a well-proven management tool.
“A bad appraisal does nothing for morale or productivity, and works against the goals of the organisation.
“Clearly, HR professionals need to work more closely with their operational colleagues to ensure well-meaning policies actually get implemented effectively in practice,” he said.