Organizations moving away from appraisal succeed by building upon healthier and more realistic assumptions. They separate the purposes of appraisal, taking on only one function at a time. For example, feedback measures are totally separate from pay, development, and counseling measures for errant employees. These alternative practices also shift the primary responsibility for feedback development, and improvement to the employee. Feedback is more likely to be heard and accepted when people seek it out for themselves, choosing and holding conversations with trustworthy sources who have the needed information.
Organizations eliminating appraisal create separate systems for pay increases.
They no longer nickel and dime people with varying increase percentages based supposedly on merit. Instead companies dropping appraisal rely mostly on market adjustments, maturity in the job, and cost of living. Top performers are often rewarded through promotion or reclassification if their skill has them doing higher-level work. This has eliminated much of the annual grumbling and fallout that follows arbitrary pay adjustments. Many organizations in the retail, finance, healthcare, manufacturing, service, education industries, and the public sector have successfully parted with appraisal.