Performance appraisal is the most important aspect of the human resources function. It is a critical management process because it enables several goals to be achieved:
- Measuring past performance and recognizing achievement
- Providing a basis for rewarding employees commensurate with their achievement
- Developing employees and enhancing their success by building on strengths and targeting weaknesses or improvement
- Ensuring that management priorities and expectations are achieved
- Provide support for decisions about each employee’s future
- Creating documentary history of performance deficiencies in case dismissal is becomes necessary
Performance appraisal needs to be an ongoing process rather than being confined to the annual completion of a form. By communicating frequently on performance, supervisors and employees forge productive working relationships. A single error does not take on disproportionate importance, and supervisors are less likely to be unduly swayed by most recent events when completing an annual form. Many supervisors find it helpful to keep notes on performance during the year which they can reference during the performance appraisal process.
The Appraisal Interview
Preparation. A key aspect of performance appraisal is the appraisal interview. For maximum effectiveness, supervisors are encouraged to prepare by taking the following steps:
- Review the employee’s self-appraisal.
- Schedule the interview about week in advance and this will give the employee an opportunity to prepare.
- Allow enough time for adequate discussion but not an extended session which can turn into a forum for complaints.
- Be sure to set up private location where confidences can be exchanged. Try to prevent visitor, telephone or email interruptions.
Related Matters. Because the performance appraisal interview is one of the few chances for a supervisor to have a structured discussion with an employee about performance, it is also an appropriate time to discuss the following related matters:
- Job description. At least annually, the job description should be reviewed to make sure it is still current and comprehensive. If significant changes are needed, a revised version should be submitted to Human Resources with a request that for rating review. A revised job evaluation questionnaire may also be a good idea. Revised job description and job evaluation questionnaire should not be submitted with current performance appraisals or recommendations for salary increases. Human Resources will need to wait to process these requests until after the annual review is completed.
- Career development. Employees may want to discuss their career plans and how best to prepare for positions to which they aspire. Supervisors should be candid and realistic in discussing future job opportunities and the employee’s qualifications. Willingness to relocate may be an issue.
- Training. This is the time to discuss additional training needed to improve performance. This training may take the form of college and university courses, workshops and seminars conducted by professional associations and consultants, or an individual program of reading and research.
Setting of Objectives for the Coming Year. One of key feature of performance appraisal is the setting of objectives for the coming year. This process can be made more effective by keeping several these ideas in mind:
- Allow the employee to participate in setting objectives. People are generally more committed to the achievement of goals they have helped to set.
- Goals should be reasonable, observable, and measurable.
- Setting goals establishes priorities for the coming year. Without knowledge of the supervisor’s priorities, an employee may err by spending too much of his/her time toward achieving a goal that is not a high priority.
Clearly, it is easier to set goals for some jobs but others less so. However, objectives may be established for any job. Increasing a revenue goal by 10 percent, reducing an error rate by 10 percent, or reducing processing turnaround time are all goals which are appropriate in employee appraisal. Similarly, special projects, revamping office systems, or writing a manual or designing an effective procedure also allow for objectives to be set.
Praising employees for good performance is the pleasant part of performance appraisal; the more difficult, but equally necessary, part of the process is being candid with employees about performance deficiencies. This task is important for two reasons:
- Since a major goal of performance appraisal is performance improvement, employees need to know where they are falling short of expectations so that they may improve.
- If employees are either unable or unwilling to meet the expectations of the job, dismissal may eventually be necessary. Without documentation of performance deficiencies, dismissal is very hard to accomplish and could involve considerable risk.
In documenting performance deficiencies, it is important to be specific and cite examples. An employee may only be confused by being told: “Your attitude is a problem.” It would be better to convey more information. A supervisor could be as specific as: “Your failure to call and tell me that you would be an hour late created a problem because a messenger arrived to pick up a package, and we could not find it.” The chances of improving a performance deficiency are increased when the employee understands exactly what the problem is.
Some Additional Guides, Notes and Comments
- A performance appraisal should be based on an employee’s typical performance over the entire period under consideration. Note: be sure not to give too much weight to recent events or one-time incidents that are not typical of the employee’s normal performance.
- Base appraisals on accurate data obtained from records whenever possible or from careful observation when this is not possible. Note: compare the performance of the employee being appraised with the performance of all individuals who have performed the same job, but be sure to keep in mind the requirements of the job.
- Compartmentalize each factor and avoid having your appraisal on one factor influence your appraisal on other factors. Note: many reviewers demonstrate a tendency to give an employee who rates very high on one factor a higher rating on other factors than may be merited. Similarly, if an employee is weak in one respect, the appraiser may assume the employee is weak in other respects. This may not be true and each factor should be considered independently of the others.
- Avoid Vague Impressions. To rate a person’s performance accurately, knowledge of the individual’s performance is key. Use facts and refer to records as available.
- Do not rely on length of service/job grade. Make sure job grade and length of service do not affect the rating; consider only the employee’s performance as it relates to the specific requirements of the job. Avoid rating an employee too highly simply because he/she has been with the company for a long time, but actually performs at an average level.
- Forget personal feelings. Keep your personal feelings out of an appraisal! Personal feelings are a form of “bias” and that is something to avoid. Be on guard against the typical tendency to attribute greater proficiency to employees who are well liked or who are gain your empathy.
- Ignore previous appraisals. Each appraisal needs to be completed without refering to previous appraisals. Big differences do not necessarily mean that the present or past appraisal is incorrect.
- Watch out for routine patterns in appraisal factors. Look for any inclination whereby appraisal of factors fall into a routine or consistent pattern unless actually the grading is justified by the performance under review. In most cases, people have significant differences with respect to the various factors considered.
- Take time to consider your appraisal. Allow enough time to appraise properly and accurately.
- Use true opinion. Rely on real opinion and do not hesitate to differentiate between the performances of employees.
Sample Policy Statement:
Although performance appraisal is demanding and time-consuming work, it is our experience that it is well worth the effort, employees have a right to expect regular feedback on their performance. Further, supervisors who expect good performance will increase their chances of getting it if they praise employees who perform well and provide constructive criticism when performance falls short of expectations. This is why we use a performance appraisal system which values honest dialogue. Additionally, our company has established fair management and real development of people as true priorities by assigning the high values to these factors.