Performance Appraisal Best Practices

Measuring the performance of an employee has evolved over the years. What was once a simple checklist has now become a very sophisticated process. Productivity is a major concern in a highly competitive world marketplace, and work must produce good results. Performance appraisals should, therefore, be taken seriously and conducted efficiently so that an employee better understands expectations, and where he or she needs to improve. There are best practices to generate effective performance review sessions. Below are some of the most important ones that merit attention.

  1. Develop the Appraisal Instrument/Method

This is a critical first step which is essential to the entire process. Companies that borrow appraisal tools from other establishments run the risk of a bad appraisal that is more confusing than constructive. A bad performance system can be time consuming and do more harm than good, so focus on finding a tool that is a good fit for your organization. 

 

  1. Stress the Importance

Upper management must assume the responsibility for making it clear how important performance appraisals are. No, this is not just an annual event, but a means to guarantee productivity and solid performance. Indeed, it is a sensible idea to include all conducted performance appraisal sessions as a performance objective for any supervisor. Performance appraisal training should be mandatory for all managers and supervisors. Human resources must train managers on how to perform an effective performance appraisal, with the appraisal tool as part of the training sessions.

 

  1. Understandable, And Achievable, Performance Objectives

Every employee’s performance objectives must support the overall corporate objectives. This will help an employee understand that his or her performance is part of the overall success of the organization. Achievable benchmarks are important, and Key Performance Indicators (KPIs) carefully explained.

Goal-System-Software

 

  1. No Surprises

The performance appraisal is almost always followed by a formal sit-down meeting and is the final act of year-round performance management. A supervisor or manager has opportunities throughout the year for informal feedback sessions with the employee, letting this person know how to achieve expectations and where improvements ought to happen. The intent of the on-going communication is to avoid any surprises when the performance appraisal session itself begins. A subordinate should have a fairly good idea what is going on in the appraisal by the time of the meeting. That is possible only if the manager has openly communicated about performance during the entire year.

 

  1. Prior Preparation Ought to Include Employee Input

A solid best practice is to provide the employee a battery of questions one or two weeks before the review. The employee has a chance to note what success happened in the past year, and where this person feels there were problems. The employee input gives a manager a better understanding of past events from the employee’s standpoint. While it may not change the overall decisions about performance, the information may allow for some modifications that are more consistent with what truly happened.

 

  1. Schedule the Meeting and Do Not Delay It

There are still horror stories of people not getting an annual performance review. This is a problem for management because it denies needed feedback to an employee. The performance appraisal may be a chore for some managers, but it is a necessary one. A performance review needs to be scheduled, and the employee notified as soon as possible. It is up to the manager to make sure sufficient time is scheduled, and a quiet space is available. On average, a performance appraisal will take anywhere from 30 to 60 minutes.

 

  1. Subordinate Input Must Be Encouraged in the Meeting

A good performance appraisal is going to be a two-way street. The manager must allow for the employee to respond to observations and give a personal point of view. It is quite possible that a negative reaction from the employee may happen but remember the purpose is only about encouraging and guiding the employee.

HR-Employee-Exit-Interview

  1. Beware of the Halo Effect

The Halo Effect is a term often mentioned in behavior management literature. When it comes to the performance appraisal, this phenomenon happens when recent events have a predominant influence on the appraisal. It can be positive or negative, depending on what has been happening in the last couple of weeks. The Halo Effect isn’t honest or fair, even if the evaluation is positive overall. An objective performance appraisal is important, and that means looking at the good and the bad. The manager should review the entire year. You can avoid the halo effect by moving to a continuous feedback culture that embraces in the moment feedback. 

Halo Effect

A good way to document the employee’s behavior during the year is to note critical incidents. These are occurrences which influenced performance. It can be a goal achieved or a project which failed. Documenting critical incidents does not have to be just the responsibility of the supervisor. The employee can be asked as part of the prior preparation to list some critical incidents which he or she believes are important. Such sharing of information makes for a complete assessment of performance.

 

  1. Include Positive along with Any Constructive Feedback

Employees often compare a performance appraisal with a trip to the dentist. It is never anything pleasant, and it is sometimes painful. Unfortunately, there are managers who still believe in pointing out all the shortcomings and failures. It is an open invitation for a highly talented employee to find a job elsewhere, and no organization wants that to happen. This is not the correct way to give feedback. It is possible that the overall performance is not acceptable but if you intend to keep them employed focus instead on a path to growth. Every person has strengths that can be utilized and developed. It’s commonly recognized that it’s easier to build on strengths than to focus on weaknesses. Performance reviews are about encouraging an employee to do more positive work and not demotivating them. 

Perfomance Management

  1. Take Advantage of a Coaching Opportunity.

You can add value to a performance appraisal by the type of information shared with the employee. It is possible that a person who is highly skilled does not understand certain aspects of the work environment for the task at hand. The performance appraisal gives the manager an opportunity to be a better coach, pointing out ways in which improvements are easy to make. This is commonly called a development plan and lays out areas for the employee to focus on, so they can grow and move up the ladder. 

The Instrument Matters

Much of this discussion has been about how to conduct a performance appraisal appropriately. It is important to revisit the first best practice mentioned above. The appraisal instrument will influence the overall success of any review. It must be something that adequately measures performance regarding company expectations and objectives.

There’s a lot of discussion about the best performance appraisal methods, and innovations in performance evaluation are ongoing in academia and among management behavior consultants. Management should be careful that the appraisal system best fits the organization. But there are performance appraisal systems from which to choose, which use best design practices. 

Types Of Reviews:

  • Self-Evaluation. We have touched on this with the concept of an employee evaluating personal performance before the formal session. This type can also be used on a more frequent basis to get feedback from an employee as to what they are working on, how they are feeling and what challenges may be standing in their way to high-performance. 
  • Management by Objectives. This is a standard used by many organizations. It will require establishing clear objectives that are easy to measure and basing the employee’s performance based on progress. 
  • Weighted Checklist. This is a process where the manager is given a checklist with yes or no questions to answer. Each answer has a value given to it, and the final evaluation is the sum of all the questions, with a numerical range given to Excellent, Good, Average, and Poor performance respectively.
  • 360° Feedback. It is perhaps the most comprehensive form of performance appraisal. A number of sources will be asked to provide opinions about the performance of the individual. The group can include peers, customers, and other managers. It all depends on whom the organization wants to include. This is a system that is considered excellent for development purposes because it provides a full view of those they work with. 

Employee Reviews Supervisor: Management’s purpose is to motivate, organize and lead the employees under them. Research has shown that the best way to rate their performance is by asking their employees a standard set of questions like “do I know what is expected of me?” and “does my manager care about me personally?” Managers should be rated not based on how their supervisor perceives them but how they are equipping and leading those whom they serve.

How Much Is Enough? An annual review is no longer enough, it suffers from the Halo effect and doesn’t provide any sort of timely feedback. You can certainly do a yearly review in addition to check-ins. The gold standard is anytime feedback, allowing managers and employees to share feedback with each other in the moment. These same organizations have moved away from compensation determined by competencies and instead moved towards objective based compensation. In this, you are paid more if you accomplish more. There is no one size fits all, all organizations have different cultures and different needs. It’s worth looking at all the options and considering what your organization would most benefit from.

Using a tool like DeepTalent allows you to automate all these processes and move to a more employee positive performance culture. Performance evaluations are an excellent means of letting an employee know where he or she stands. The review is also an opportunity to go over ways to improve already satisfactory performance. It can include discussing training opportunities and looking at prospective career paths. The performance appraisals data is a valuable tool for upper management. The results can give a strong indication of the success in achieving objectives, or the deficiencies that are preventing desired results from happening. It is possible that an organization will change its objectives considering what the performance appraisals uncover. Deciding on the right design of the appraisal process, and how a manager will conduct the appraisal will result in the kind of information both the employee and the organization needs to know.