What is a
performance appraisal?
A performance
appraisal is a review of an employee’s job performance. It takes into
consideration their work, their contribution to the company, but also their
interaction with others, and their work ethic. Appraisals are part of a
company’s performance
management initiative, and help managers measure an employee’s progress
against pre-defined goals and targets.
A performance
appraisal can be conducted annually, semi-annually, or quarterly. Some also
call it a performance review. While the terms can be used interchangeably, a
performance review can also be conducted monthly or even weekly. Appraisals
usually refer to reviews organized at longer time intervals.
Types of performance
appraisals
Performance
appraisals differ based on who is conducting them. A classic appraisal is
performed by managers and leaders. Sometimes the HR department can be involved
as well.
Recently, businesses have been trying different approaches
to appraisals, by including the employees themselves in the process.
A self-assessment, for example, is one when the employee
evaluates their own performance. They’re usually given a questionnaire or a
scale that they can use to analyze their work.
A peer assessment is one where an employee’s coworkers
evaluate their performance. The 360 reviews, which has gained popularity in
recent years, includes an evaluation from both coworkers and managers.
Finally, the negotiated appraisal, where a mediator is
present during the review, is useful when a conflict exists or could arise
between the employee and the manager. The key is to allow the employee to
present their assessment first.
Companies may use one or many types of performance
appraisals. For companies that do bring in multiple perspectives, the goal
is to get a varied perspective on the employee’s performance that can be used
to create a holistic understanding of that person’s impact.
Tips to
conduct a successful performance appraisal
A performance
appraisal should be an ongoing process. If you set aside only one day or
week each year to collect data, analyze it, and draw conclusions, you’re in for
a disaster.
Engage with your employees as often as possible. Give
feedback and be open to receiving it, and make notes of progress and other
things that stand out to you. This will ensure that, when it comes time for a
formal appraisal, you have clear and representative examples of that employees’
performance from throughout the year—not just from recent memory.
Here are some more tips to help you run a successful
performance appraisal.
1. Be
clear with your expectations
If you want to avoid distrust and dissatisfaction, the first
step is transparency. How do you define a top performer? What are some behaviours
that are not aligned with the company values and, therefore, you won’t tolerate
them? Create the definition of a top performer, and then clearly communicate
that to everyone in your team.
Remember, your employees are human, so asking for perfection
is unrealistic. Set goals they can reach without burning out.
2. Always
give constructive feedback
Constructive feedback is a must. Everyone makes mistakes at
some point and your employees are no different. If you criticize for the sake
of criticizing, nobody wins. Your employees won’t learn how to correct their
mistakes, they won’t improve, and neither will your business.
Sometimes you might see the cause and the solution right
away. Perhaps you notice someone is always failing at tasks requiring certain
technologies. The answer could be a quick course to help them learn those
skills.
Other times, the causes and solutions are not so easy to
figure out. For instance, if an employee misses work a lot or doesn’t deliver
projects on time, there are various things that could be happening.
They might be burned out or they might feel the tasks are
too difficult. There might be issues with other teammates, or the tasks may
simply be unclear. In this case, you need to be open to dialogue. Find out why
these problems started happening and work with the employee to find a solution.
3. Look
at past performance appraisals
To truly see progress or problems that appeared recently,
you need to look at the entire context. Without doing that, you can see the
performance on a certain project, but you won’t see the growth or the
commitment of that person long term.
Review past performance appraisals,
and make notes of positive contributions and areas of improvement throughout
the year. This will ensure that performance appraisals aren’t just a snapshot
in time, without the appropriate historical context.
4. Decide
how you want to incorporate peer assessments
If you decide to run a peer assessment or a 360 review, keep
the subjectiveness factor in mind. Don’t make big decisions based on the
coworker's opinions of one another. Instead, look for worrying patterns.
For instance, if everyone is always complaining about the
behavior of one person, that might be a red flag. Start investigating their
work, their performance, and their relationships, before drawing any
conclusions.
5. Be
open to feedback
Don’t let the appraisal be a one-way process. Engage in a
dialogue with your employees and see what they feel is working and what isn’t.
How do they truly feel about the review process? What about their work? Use
this opportunity to create a safe space for sharing thoughts.
Performance
appraisal examples
How you phrase your appraisals makes an enormous difference.
Only highlighting the negatives and having an accusatory
tone will result in disengaged, unsatisfied employees who are more likely to
quit when they get the chance.
Instead, lead with the positives and help them learn from
their mistakes and you’ll watch people grow and perform better each day.
You can start by looking at their attendance, then at their
capacity to bring innovative ideas, their communication skills, their time
management, and so on. The categories you choose will depend on the employee’s
job and the company’s goals.
An example of such a report that looks at attendance, time
management, collaboration with the team, communication, and problem-solving
could look something like this:
“You always come to work on time. You follow your work
schedule closely and are always available during working hours.
During the past year, you delivered all your tasks on time.
You always have a good sense of the deadlines and the time required to perform
a task.
In terms of teamwork, you work fairly well with others. You
take your teammates' opinions into consideration and everyone feels like they
can talk to you. However, your performance when working with a team seems to be
lower than when working solo. Try to improve this aspect of your work in the
future, perhaps by improving your communication with others.
When it comes to problem-solving, you do your research
thoroughly. You try to come up with the most practical solutions and take all
potential scenarios into account. I would suggest, again, trying to improve
communication with your team. Sometimes, you end up spending more time on
finding a solution when you could be asking others for help.”
Take the
subjectivity out of performance reviews with people analytics
Performance reviews are a useful, but often challenging
process. Reviewers need to be fair and transparent, but also offer constructive
feedback that helps the employee grow. Unfortunately. Many performance reviews
are subject to subjectivity and incomplete data. People analytics can help with
that.
Using a people analytics platform, managers can gather key
data points that help to create a detailed, informed, and objective picture of
their team’s performance. This takes the guesswork out of performance reviews,
and makes them more applicable and actionable for the employee.
Of course, it’s not only individual contributors that need
their performance review. Manager performance reviews are equally—if not more
important—for the business. People analytics platforms help companies collect
and analyze data about their managers’ impact on the people around them. This
includes KPIs like retention, engagement, and productivity. By doing so,
companies can reliably identify their top leaders, and those that may need
additional coaching.
All of this data, of course, ties directly into strategic
compensation planning. With people analytics, companies can draw a clear line
between individual performance and merit increases, helping them make better
decisions about who should get a raise, and when.
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