What Is A Performance Appraisal?

A performance appraisal is a vital part of HR (Human Resources) that looks at how well an employee has done their job over a certain time. It helps to see if they’ve reached their goals and find out what they’re good at and where they can do better. The process gives useful feedback to help them get better at their work. It also plays a role in deciding fair salary increases and promotions. During performance appraisals, managers and employees team up to set clear expectations and goals for the next period of work.

If you want to set up a good process for evaluating performance appraisals in your company, keep reading to get answers to your questions about the performance appraisal system.

What Are The Different Performance Appraisal Methods?

1. Self-evaluations

Self-evaluations encourage employees to assess their own performance, allowing them to reflect on their efforts in achieving work goals aligned with the company’s objectives. This process provides additional insights to managers, promoting fair reviews devoid of implicit biases.

Typically, a standardized self-evaluation questionnaire is utilized to help employees clarify their accomplishments and responsibilities. Consider incorporating the following questions into your self-evaluation:

• What are some key goals you accomplished this year, and what contributed to your success?
• Identify 3 areas where you excelled in your performance.
• Highlight 3 areas in which your performance could be improved.
• Describe any challenges you encountered in your work and how you overcame them.
• Explain how your responsibilities and achievements have grown since your last performance review.
• Share what you appreciate the most about your role and what you find challenging.
• Identify company values that you actively reflect in your daily work.
• On a scale of 0 to 8, how would you rate your overall performance?

2. 360-degree feedback

Colleagues provide insights into an employee’s performance, offering feedback from different perspectives. Feedback is collected from managers, team members, peers from other teams, subordinates, and sometimes clients. Clear expectations for reviewers are set, and managers share this feedback with employees to help them develop.

3. Rating scales

Managers use numerical or qualitative scores to rate various aspects of employee performance, such as hard skills, soft skills, quality and quantity of work, and goal progress. Commonly used rating scales include the Likert scale (agree/disagree options), the numeric performance rating scale (rating on a scale of one to five), and the behaviorally anchored rating scale (comparing performance against specific behaviors).

4. Management by objectives

Managers and employees collaboratively set clear goals and objectives for a performance period. Managers monitor progress and evaluate based on results, comparing actual performance against set objectives. Goals are defined with descriptions, connections to company objectives, guidance on achievement, and mutually agreed timelines for progress checks. For example, a salesperson may aim to increase sales by 10% in the next quarter or reduce the sales cycle to three months.

Whichever performance appraisal method your business chooses, the opportunity to exchange feedback with staff is invaluable and should remain an important priority.

8 Tips To Run Meaningful Performance Reviews

1. Brush Up Your Skills

It’s important to refine your appraisal skills, especially if you haven’t received formal training in performance management. Now would be an opportune moment to request such training. Even if you’ve undergone training before, consider seeking a refresher to ensure you’re current on company policies and best practices. Additionally, it’s valuable to solicit honest feedback from your peers regarding your management style. 

2. Preparation Is The Key

Secure a quiet meeting space with minimal distractions for a private discussion. Provide the employee with ample notice, ideally two weeks, and share an overview of the appraisal process in advance. If your organization requires employees to fill out a self-appraisal form, make sure to distribute it well before the scheduled meeting. This proactive approach ensures that the employee is well-prepared, understands the evaluation process, and has sufficient time to reflect on their performance before the appraisal session.

3. Encourage A Two-Way, Open Discussion

Engage the employee by posing open-ended questions about their performance. Provide positive feedback, express gratitude, and offer praise for their accomplishments. If the employee identifies areas for improvement, acknowledge these and guide the conversation toward discussing how these aspects can be enhanced through training or additional support. This approach fosters a constructive and supportive dialogue, encouraging the employee to reflect on their strengths while addressing areas where growth is possible. It also emphasizes a collaborative effort to enhance their overall performance.

4. Remember To Listen

Actively listening and paying attention to non-verbal cues, such as body language, is crucial. Allow the employee to express themselves without interruption, but feel free to ask clarifying questions to ensure a thorough understanding. Before transitioning to the next topic, take a moment to summarize the conversation and verify mutual agreement on future expectations. This approach promotes effective communication, demonstrates respect for the employee’s perspective, and ensures a shared understanding of the discussion points and expectations moving forward.

5. Incorporate The 7 Drivers Of Employee Engagement Into Your Discussion 

This approach allows employees to reflect on their workplace experiences openly. Consider having them respond to the following questions using a Likert scale, such as 0 (never) to 5 (always), providing a measurable way to track changes:

• Freedom: Do they have the flexibility to choose and make decisions?
• Clarity: Are there clear goals and a sense of purpose?
• Challenge: Do they find their work enjoyable and relevant?
• Growth: Do they have opportunities for personal and professional development?
• Recognition: Are they receiving praise and appreciation for their efforts?
• Togetherness: Is there cooperation, support, and trust within the team?
• Voice: Are their ideas and opinions respected?

6. Do Regular Feedback

Provide staff with the opportunity to discuss their performance on an ad-hoc basis, not just limited to their annual performance review. Encourage both formal and informal discussions, ensuring that training and development opportunities are regularly offered as needed.

Avoid the practice of “saving up” feedback for the annual review. Any concerns about an employee’s performance or behavior should be addressed promptly to eliminate surprises during the annual appraisal. When providing feedback, use specific examples to illustrate points. If there have been prior discussions about a particular issue, it is crucial to include this in the formal performance review process. Similarly, don’t hesitate to acknowledge and celebrate successes outside of the formal review period. This approach fosters continuous improvement and a positive work culture.

7. Ensure Objectives Are SMART

When setting objectives for employees, ensure they are specific, measurable, achievable, realistic, and time-bound (SMART). Before finalizing the objectives, confirm that the employee agrees with each of these points, as their perspective may differ. Align the objectives with overall business goals, helping employees understand their role in the broader context and how they can contribute positively. Consider providing copies of your own personal objectives, team goals, and the business priorities for the upcoming months and years. 

8. Document a record of the discussion (either electronic or paper-based) 

Provide the employee with a copy of the agreed-upon objectives as soon as possible after the meeting. Offer them the opportunity to suggest any necessary changes once they have had time to reflect. This approach ensures transparency and gives employees a chance to review and provide input on their objectives, fostering a collaborative and constructive environment. The impact of performance appraisal on employee productivity questionnaire can also be filled with a set of questions based on the discussion.

Traditionally, performance appraisals have centered on evaluating past performance, yet it’s equally crucial to emphasize the future.

An effective performance appraisal is a personalized, two-way conversation between the appraiser and appraisee. It should include:

• Feedback on the employee’s contributions to individual, team, and corporate goals.
• Setting SMART objectives for the upcoming review period.
• Discuss training needs and potential development opportunities for the future.

While your organization may choose annual performance appraisals, it’s essential to ensure that this isn’t the only opportunity for staff to discuss their performance. Managers should provide regular, informal performance feedback throughout the year. This approach promotes ongoing improvement and a proactive focus on both current and future contributions.