If you are an employer or manager, it is important to understand how to conduct performance appraisals. A performance appraisal (also called a performance review) is a formal process in which an employee's job performance is evaluated by their supervisor or manager. This evaluation can be done through a variety of methods, such as interviews, surveys or written evaluations, and should be done at least annually. The goal of a performance appraisal is to identify areas where the employee needs improvement and to help them set goals for the future.
When done correctly, performance appraisals can be a valuable tool for both employers and employees, so having a good appraisal process in place for assessing staff performance is a must for any organisation. Read on for our top tips on how to appraise staff and how to improve your company's performance management.
Why are performance appraisals important?
Performance reviews are important because they provide a way of measuring an employee's job performance, but they are also important due to the fact that they offer an opportunity for one-to-one conversation between staff and management.
Appraisals can identify areas of the employee's work which may need improvement while at the same time offering an opportunity to discuss how these can be addressed (for example, with additional training or by providing them with the tools necessary to learn relevant new skills). The appraisee's work can be discussed in the context of personal performance, but also in terms of the bigger picture; how it relates to the business. This opens the door to conversations about career development and provides a space for the manager and staff member to exchange new ideas about the direction of the organisation.
Fundamentally, the performance appraisal process allows people to connect with their managers in a way that can build trust between both parties and motivate the employees - helping to foster a positive company culture.
How to conduct performance appraisals
It is crucial to ensure that all managers conducting performance reviews have received proper training on the performance appraisal system. This is to make sure that the appraisals for all employees follow the same structure and are conducted in an objective manner. Here are a few key things to keep in mind when fine-tuning your performance appraisal process:
The first step in conducting a performance appraisal is to adequately prepare for it. As a manager, your time is valuable, so it's important to make sure that both you and the employee get the most out of the process. Remember to set aside an appropriate amount of time in your calendar so that the conversation is not rushed, and be sure to inform the employee in advance so that they can also prepare.
Another aspect of the preparation is reviewing the employee's job performance to identify areas of strength and weakness. There are two widely-used ways of doing this: '360 degree' feedback and psychometric testing. 360 degree feedback involves collecting comments from the appraisee's co-workers, subordinates, team leader (if this is not yourself) and themselves, usually in the form of a survey. By reviewing their own self-appraisal alongside the critical appraisal provided by others, you can gain a comprehensive insight into their performance. Psychometric testing (or skills testing), when used as a performance appraisal method, acts as an assessment of the individual's skills. Implementing this into your performance appraisal system will provide you with a highly objective measure of their performance. Always bear in mind the individual's job description and use the responsibilities of their role to judge how their performance compares to the expectations of the company.
Crucially, you should also make sure to look over the report of the last appraisal this employee had. Doing this will help you to gauge the progress that they have made since, which can affect the direction of the upcoming appraisal.
Provide specific feedback
The next step is to give feedback to the employee. Share both positives and negatives with them - this means being clear about what they did well and what they need to improve. The appraisal should be conducted for the purpose of helping the employee improve their work performance, not for the purpose of punishing them, so try and give constructive feedback. Use specific examples rather than speaking generally, as this will help them to better understand the feedback.
The performance appraisal meeting is not the place to drop any bombshells. If an employee has been seriously underperforming, any concerns on the part of management should have been addressed in the moment and not left until the annual appraisal!
Listen to the employee
Keep in mind that staff appraisal meetings should be a two-way conversation - in fact, the appraisee should ideally contribute more when it comes to the discussion. As much as it is a time for management to appraise employees, it is also a time for them to listen to what staff members have to say, so be prepared for them to raise issues too. It is important to be open-minded and to consider the employee's perspective.
Additionally, if an employee has been underperforming for a while it is important to listen and give them a chance to explain any underlying factors that may have contributed to their poor performance. Rather than simply telling the individual, try to encourage them to suggest their own ideas regarding what they can do to improve.
Make a plan of action
Another key to a successful appraisal system is to make a plan of action. Remember that the performance discussion should be future-focused, so don't dwell too much on valuations of past performance. Identify specific goals for the employee and outline a plan for how they can improve their performance. It is important to be clear about what the employee needs to do and to provide them with resources and support. Make sure that the goals set for the individual are realistic and that they align with the wider team.
The action plan should also address any concerns the employee has brought up relating to the organisation. If the performance appraisal has revealed any areas in which management could improve, looking into these should be included in the plan.
The final step is to follow up with the appraisee. This means conducting regular, informal check-ins with them to ensure that they are making progress towards their goals, and making time to follow up on any ideas they raised in the performance appraisal.
To perfect your performance management processes even further, it can be a good idea to collect feedback from employees on the appraisal process. By having staff complete a survey or questionnaire (maybe anonymously), you can improve the quality and effectiveness of your company's formal performance appraisals over time.
As you can see, performance appraisals are a vital part of performance management. They can motivate staff, make them feel like management values their opinion and improve individuals' performance at work. Browse our range of skills assessments here to implement psychometric testing into your appraisal system today, and watch your performance appraisals go from strength to strength.