Effective Performance Appraisal Processes

The yearly task of carrying out employee performance appraisals can be an arduous task when considering employee attitude and the clarity of communication between the employer and the employee.  In this edition of Astronology, we consider the topic of performance appraisals, how they can be instrumental in monitoring employee performance and rewarding employees, and techniques to make the process more effective for all involved.

There are several different methods for conduct performance appraisals. One is not the best, nor is there a “right” or “wrong” option.  The most effective approach is the one that facilitates communication and professional growth while taking into consideration the number of employees in the organization, the types of jobs employees hold, and the organization’s culture.  The four most common performance appraisal approaches, according to The Houston Chronicle Online, are the following:

• Rating Scales: The employer establishes the key areas used in evaluation, such as job skills, teamwork, communication skills, reliability, and flexibility.  Reviewers rate these areas accordingly on a scale, such as three points, five points, or even 10 points.  There are additional customization options to consider when implementing this approach.  For example, certain evaluation criteria may weigh more than others, depending on the nature of the position being reviewed.
• Critical Incidents: In this approach, recordkeeping is key.  Managers create a detailed analysis of occurrences where the employee performed well and / or needs improvement. Some employers combine this method with a rating system to give a rating for each performance occurrence.  For example, the scale can include key areas such as teamwork or communication skills, with employees reporting detailed incidences of when the employee performed well or poor in these areas.
• Management by Objectives: In this highly collaborative method, employers and employees together create a list of specific and measurable objectives that are realistic and practical.  The employee then receives these items as goals to strive towards within the coming year.  During the scheduled yearly employee review both the employee and his / her manager assess if the initial goals were met, where success was had, and where opportunities for enhancement lie.
• 360 Degree Feedback: This is another performance appraisal method that is quite collaborative. A 360 degree feedback approach includes input about the employee from the employee’s fellow co-workers, internal and external customers, and management.  This process of gathering feedback can be done via survey or interview, depending on the scope of outside involvement and the number of items to be evaluated.  Such feedback is then consolidated based on demographic, such as co-worker or customer, and shared with the employee.  This approach provides a more rounded perspective on the employee’s overall performance throughout the review period.

When considering the use of a 360 degree review system, think carefully before implementing.  A 2011 SHRM article quoted a leadership coach stating, “I’ve seen departments blow up and employees leave companies because the 360 wasn’t handled properly.”  Feelings may be hurt, reviewers may feel overwhelmed, and a general lack of understanding may prevail.  However, such issues are not limited to 360 degree reviews.  Proper execution should be considered before implementing any performance appraisal method. If a manager only provides negative feedback, without balancing the review with positive comments where truly applicable, or positive encouragement towards achieving professional growth, the employee may perceive the review as unfair or biased.  Similarly, reviews with all praise and no areas of improvement can provide employees with an inflated sense of accomplishment that could backfire, leading to casual performance afterward.

It’s essential to also remember that in order for any performance appraisal method to work, Human Resources and management need to be diligent and accurate in their recordkeeping. Moments of high performance, moments that lack professional performance, and disciplinary actions recorded for yearly review all help the appraisal team to achieve a well-balanced view of an employee and his / her contribution to organizational success.

               

When conducting a performance review with an employee, it’s essential to conduct homework first.  Begin with preparing the performance appraisal document. Some organizations have employees do self-evaluations to examine during the review.  Such an approach enables the reviewer to obtain both a better understanding as to where the employee feels his / her level of performance is for the year and the employee’s buy in.  Preparing a self-review also gives the employee time to prepare comments that he or she may want the opportunity to express, considering the privacy of such reviews.

For a performance review to be successful, it needs to become a way of working.  As such, always plan the next step: the follow-up action.  Follow up actions can include establishing new goals, discussing areas needing improvement and associated development steps, and when tied to salary increases, confirming the employee’s wage for the year. Schedule a follow up meeting for matters that can’t be resolved in the moment of the performance review.

Performance review need not be challenging from a technical perspective.  If you would like to learn more about your organization’s performance appraisal or performance management options, give Aston Solutions a call.  Our Web-Based Talent Management System Flare™ includes a performance appraisal module that will allow your organization to automate your performance appraisal in a web-based platform that will allow for easier performance review meetings!

“No matter your performance appraisal approach, it’s essential to take action and provide feedback to employees,” states National Director Michael Maciekowich.  “Performance appraisal is an essential part of the total rewards equation.  Those organizations not taking advantage of this opportunity to enhance performance risk disengagement and negative bottom line results.  In today’s competitive landscape, performance appraisals are essential to sustained organizational success.”