• An employee performance appraisal is a process companies use to gauge an employee's responsibility and actions in their job position. This process is typically a formal function and occurs on an annual or semi-annual basis, although business owners and managers can create their own schedule for the appraisal process. While performance appraisals give owners and managers an opportunity to thoroughly assess an employee's actions, it can also create a difficult operating environment. Eliminating this process can provide some advantages for both the company and employees.
  
  

Avoid Confrontation

• Performance appraisals are not always positive, which can lead to confrontations between employees and managers. An employee may take offense to his appraisal or believe that company management is attempting to get rid of the employee. This confrontation can also involve customers and other employees or managers who think the employee does a good job. While the employee performance appraisal process may take these situations into account, it may not outweigh the negative situations, which ultimately lead to the confrontation.
  
  

Delay Corrections

• Companies may use the performance appraisal process to take corrective action for an employee's activities. The problem with this situation is that corrective actions can face delays if the company only uses an annual or semi-annual evaluation process. While managers will typically correct employees on minor issues or activities throughout the year, the appraisal process may discuss other issues. However, waiting to apply corrective measures can lead to the employee thinking he completes tasks in a normal manner and possibly not understand the corrective process.
  
  

Disciplinary Activities

• Employees may interpret the performance appraisal process as a disciplinary process. While this may be true in some cases, employees may not take criticism very well. Using an entire process to criticize or critique an employee's activities can be a difficult process. Owners and managers can avoid this situation by using a process that is timelier than the performance appraisal process. Employees may also find it difficult to face potential disciplinary actions for an issue that is several months old.