Old fashioned performance appraisals clash with empowerment. Employees need to manage themselves like independent contractors. Suppliers monitor their own performance by surveying customer satisfaction. How can you build in more self management and self assessment to your performance appraisal process? Can you use less top down appraisal and more feedback from a wider range of internal and external customers?
Performance needs to be discussed at least once a quarter with the subordinate reporting progress. The subordinate should the meeting, reviewing what went well/not so well and what will be done to improve. The manager operates as a coach, less as sole judge.
This puts less pressure on both sides as power is more equal - hence less defensiveness. When bad news needs to be conveyed, more frequent discussions make it less feared.
Annual appraisals put too much emphasis on a one-time discussion, hence aversion to it on both sides. Effective performance appraisals combine good news with a prompt to improve.
Preserving self esteem is an essential feature of a well conducted appraisal meeting.