There are increasingly two schools of thought (we're sure there are probably 2002): one for and one against Appraisals. And in both, the bottom line still is that they will cost your company money if not handled well. As we know, in vast numbers of cases they aren't.

Although the appraisal format may be key, the best procedures in the world won't really be effective if the person running the appraisal isn't handling it efficiently, professionally and with long-term care involved.

Performance appraisals are almost always a one or two-times a year process rather than something that is a daily part of a manager's job. They usually become 'tick the box' exercises that cause a great deal of anxiety on both 'sides' and once they're competed they aren't looked at again till the next time.

Difficult feedback gets postponed or sugar-coated, or even worse, lied about on the Appraisal form. A lot of managers don't want to put down in black and white that someone's performance has been under par and therefore they (the manager) will be responsible for that person not getting a pay increase or promotion.

In turn, appraisals can also lack objectivity and, therefore, have more personal rather than professional views included which could be detrimental.

In addition, if everything is focused on the appraisal process then you run the risk of creating anxiety during the build-up and a lack of motivation and productivity as people anticipate the results. In other words, there should be no surprises during an appraisal.

Supposedly only 5% of organisations say they have satisfactory appraisal processes, but we got that information off the Internet, so Id take it with a pinch of salt!

A truly good Appraisal is actually an agreed summary of what has been happening on an on-going basis between appraisals. If it is left to review twice a year, or quarterly, all the opportunities to support and guide the employee to improve get missed. People need to be engaged in the idea that managing people - and being managed - is constant.

Fear, uncertainty, collusion, duplicity, embarrassment, laziness, guilt and sheer incompetence are among the reasons why appraisals are often not worth the paper they are written on.

One of our clients told us that rather than completely redoing their appraisal process they decided to 'mark down' their performance related pay levels: in other words if someone had been scored a 4 (out of 5 levels) they were lowered to a 3. This was because they discovered that most managers scored people higher than their performance merited. It was an exercise in trying to get rid of the 'invisible incompetence' that the process colluded in.

A great appraisal needs to be fair, objective, two-way, realistic, clear, on-going and specific.

It also needs to be positioned well.

It's easy to shoot yourself in the foot if you place too much emphasis on the actual appraisal process and not on the on-going performance management. People will focus on the process rather than the objective, which is to help people develop in to more effective, better managed members of staff.