Performance appraisals are a critical element of the entire performance management process. Appraisals are also an important way to demonstrate to employees that the organization takes their career progress and contribution to the overall organizational performance very seriously. Whether they are conducted just once a year, or on an ongoing basis, appraisals are an important milestone in the communication between employees and their managers.
What exactly is an appraisal? At the basic level it is an assessment of an employee’s work undertaken at a fixed point in time, often used to determine the degree to which stated objectives and expectations have been reached, to set down objectives for the future and frequently bearing some relationship to promotion and compensation prospects. Although reviews may be conducted intermittently, a formal annual wrap-up of all the ongoing, informal feedback and recognition that has occurred throughout the year may be helpful in providing additional recognition that ideally has been given by colleagues throughout the year.
Traditionally performance appraisals were one-to-one affairs between an employee and their line manager. An individual’s direct superior is still seen as the best person to complete the entire performance management cycle as they are the only ones that have the authority to approve job changes and additional resources, such as training.
More modern approaches however propose 360-degree performance reviews that provide input from multiple stakeholders.
It is up to each individual organization to decide who the relevant stakeholders are for each employee. Taking a formal performance management course can help managers decide who are the most important stakeholders for a review. In some cases it may be considered appropriate to have individuals who actually report to the employee (their subordinates) involved and providing feedback for the assessment. Sometimes it may even be appropriate to have external stakeholders such as suppliers, customers and contractors provide feedback. However, these latter “external” groups are more likely to provide honest feedback on an overall team rather than a specific individual.
Of course, the individual themselves are an important part of the feedback into a 360-degree assessment. This is considered an essential piece for a well-rounded appraisal while also improving the communication between an employee and their manager.
Planning in advance of the appraisal meeting is essential if the meeting is to achieve its full potential. The individual under review must be presented with “evidence-based feedback”, not just anecdotal stories. A copy of the performance plan should be presented to the employee well in advance of the meeting so that they have time to go through it and prepare their feedback on it. Similarly, any self-evaluation documents should be circulated well in advance along with documented feedback from third party stakeholders, if there are any.
The meeting itself should commence with the employee’s self-review. The rest of the meeting should focus on the previously agreed S.M.A.R.T goals and their achievement (or not). The manager will ideally spend close to 85% of the meeting in listening mode. This is not a time to lecture!
The meeting should be wrapped up by agreeing S.M.A.R.T goals for the future and confirming or redefining the job role and responsibilities. Ideally, no discussion around compensation is held during this meeting as it will simply distract from the conversation around performance. Compensation discussions are best left for an entirely different meeting. A final important activity is for the manager to ask the employee to summarize the key points of the meeting, which the manager then confirms or clarifies.
Appraisals and performance reviews are hugely important in directing and motivating employees. Ensuring that the organization is using best practices vastly increases the likelihood that this will lead directly to improved individual and overall organizational performance.