For so many reasons performance appraisal destined to be fail, most important part of reason comes from emotional aspect: as human no one feel like to be evaluated, and no matter what approach being used, for example KPIs or subjective method.
Other obstacle lies in culture, oriental culture pay more attention to employee’s moral and diligent, and think end results should come naturally, which wake the strength of appraisal process. When appraisal results pegged to compensation and development, it always jeopardize organizational development, and it always cause politic chaos. As for objective method, such as KPI, still leaves to much controversy, because KPI is key indicator its up and down beyond employees control, and use KPI to measure employee performance is bond to cause even more contradiction. Worked as senior consultant, introduced performance in China State Grid and China Mobile for about 8 years ago, but results is frustration when work with those clients now: it cause endless complaint, hate, unfairness, and divergences.
New way of dialog between management and employee should be invented as job is increasing shifted to information and technology focused. During consulting project consultants in China try to use appreciative inquiry to initiated change and find result encouraging and try to introduce to management as dialog tool to achieve fulfillments and growth both for management and employee.