Many managers see the performance appraisal process as nothing more than an unnecessary corporate exercise forced upon them by human resources.
But people fail to acknowledge a simple fact. If done correctly, it can help leaders increase workforce productivity dramatically and create high-performing teams.
An effective performance appraisal process aims to evaluate employees' job performance and the efforts they have put in. It reviews goals and objectives during the review period. Which significantly improves the review process in the long term.
However, lately, the performance appraisal has been getting a lot of bad publicity. Almost 51% of employees believe that performance appraisals are inaccurate.
This raises a lot of questions about the effectiveness of the standard performance appraisal system.
Many of these inefficiency issues arise because many managers simply treat the performance appraisal as a box-ticking exercise.
Subsequently, appraisals are more complex than saying "good job" or "needs further improvement." Such performance reviews only act as a time-consuming activity that can be skipped for the most's benefit.
To gain the most out of a performance appraisal process, a manager needs to adopt some new practices. Here are some of them:
Actionable Tips On Improving The Performance Appraisal Process
For a successful appraisal process, both managers and employees need to be invested in it.
Your performance appraisal methods might be good, but do you feel like they are missing something? Here are a few factors to consider while leading the next annual review:
1. Establish Performance Standards By Discussing Potential
Employee appraisal processes are not just about monitoring employees' strengths and weaknesses. It's also more than about judging whether one is a good performer or what corrective actions to take to improve an employee's performance.
The appraisal should also be about ensuring you have a positive attitude towards developing potential in your employees.
This involves two things:
Firstly, make sure you allow your employees to express what they want from their career development.
Secondly, watch out for potential in your employees that needs to be encouraged. Many a time, they might not see it yet. Motivating employees to perform at the optimum level requires them to see the potential in themselves.
During the performance appraisal, encourage employees to do a self-appraisal. Ask them to list out their own achievements and shortcomings. Very often, employees are aware of their own level of work. This will enable employees to become more self-aware.
Ahead of their appraisal meetings, ask employees what they want to bring forward or discuss.
During the appraisal meeting, discuss what the employee might like to work on in the future.
Help them in identifying, evaluating, and developing their performance for the long term.
2. Choose Your Words Wisely
Always place importance in phrasing your words during the appraisal process.
Dick Grote, the author of "How to Be Good at Performance Appraisals", said that managers should opt for more actionable worded language instead of the overused "good" or "excellent."
Additionally, Grote noted that words like "achieves," "grasps," "possess," "manage," "exhibits," "communicate" are far more powerful in getting your point across.
Here are five expressions that will help you highlight the performance of the employees:
When praising an employee, try to incorporate phrases like:
"Possess a strong sense of responsibility towards…."
"Exhibits strong team playing characteristics…."
"Manages each of his/her assigned projects efficiently…."
Use phrases like:
"Easily communicates expectations."
"Excels in encouraging teamwork and group-related activities."
"Possess the qualities to lead the team.."
Occasionally appreciating your employees' creative side can make for a more inspired workforce. Try incorporating the following phrases during the appraisal process:
"Seeks creative routes to achieve desired results."
"Sought out new learning methods to increase their skill set.."
"Continuously tries to engage teammates to solve problems in a better way."
Employees like hearing that they are improving and that it's being noticed.
"Manages to grow and improve with each passing day..."
"Is continuously looking to improve upon..."
3. Frequently Give Feedback
The single momentous mistake that companies make is to conduct appraisals only once throughout the year.
Ideally, the performance review should not be the first time an employee hears that he is not performing up to the expected standards.
This is precisely why frequent feedback should be offered throughout the life cycle of an employee to ensure that you don't take your employees off guard.
At Miami Children's Hospital, employees meet with their leaders quarterly and have "mini-reviews" to document accomplishments and pave the way for the annual review, says Janet Lara-Vital, the hospital's director of total rewards and wellness.
The reasons why the continuous process of feedback is so integral to the process of performance appraisal is because:
A continuous feedback culture frequently brings out the strengths and weaknesses of employees.
Subsequently, employees get a better idea about which areas to improve upon so that the performance appraisal process doesn't come out as a complete surprise. Also, employees become much more accustomed to getting feedback from their managers and peers, making them much more responsive during the actual appraisal meeting.
Additionally, you have a better chance of constructing a plan to address employees who aren't performing up to their full potential.
Similarly, the performance appraisal process for good performers should have an entirely different strategy.
Such high performers are often sidelined during a performance appraisal process. Managers ignore the importance of getting recognition for a great job done.
This, in itself, is a missed opportunity to communicate how much the company places value on the performance traits of these star employees.
A continuous feedback process helps in regulating frequent recognition in the workplace. This, in turn, results in increased employee engagement and, ultimately, higher performance standards.
4. Train Your Managers To Maximize The Appraisal Process
It is a well-known fact that managers aren't too fond of the whole performance appraisal system.
However, any new management change requires the company's managers to get on board with it.
The reality is most managers don't know how to go on about optimizing the appraisal process.
Dick Grote, the founder of Grote Consulting Corp., acknowledges that:
Performance appraisals have a huge impact on human happiness. A performance appraisal is a primary determinant of how much money I'm going to make or how far in the organization I'm going to get. Organizations need to take it seriously. The hard part is having the courage to be honest about exactly how well a person has performed.
Here are a few focus points to cover during training managers to conduct a much more efficient appraisal process:
Downplay Administrative Details
While training managers, avoid the usual process of being an administration chore to do. Instead, promote the appraisal system as a necessary process to better the workforce's future performance standards and elevate the business goals.
Having Difficult Conversations
Hold regular meetings for managers to discuss the importance of learning to handle difficult conversations.
No manager will be likely to have a problem with a star employee. It is the underperforming employee that will bring about complex conversations.
Gather managers around and have them go through live examples from role-playing or one-to-one interactions with their peers.
Explaining The Common Mistakes During The Performance Appraisal Process
One common mistake that managers tend to make is to have their own bias (either positive or negative) towards the employee being reviewed.
Other common mistakes that managers make:
Central Tendency: Rating every employee around an average. This defeats the whole purpose of having a rating system and the possibility of gathering valuable data from it.
Recency Rating: Evaluating employees based on the events in the last month or so instead of basing the review on the whole year.
5. Use Survey Tools To Obtain Important Data
With the advent of automation in the workplace, survey tools have become the next big thing to make your life easier.
The use of survey tools in the performance appraisal process has resulted in systematic documentation and evaluation of an employee's performance.
But appraisal results are more than just about goal-setting and job performance. It is also about how a person interacts with the team. The efforts they put into. How helpful they are to new hires.
Yet, traditional performance management systems seldom consider such aspects.
For more accurate feedback, consider using tools like 360-degree feedback. 360 degree appraisals take into account the opinions shared by an employees' peers and managers. It ensures that you get an overall picture of what a person is like in their daily work lives.
While face-to-face interactions seem to be the best option to conduct appraisals, using a survey tool has some additional advantages. Or you can use appraisal forms targeting specific areas for employee development.
For an appraisal to be actually effective, it must be "complete" in nature. That is, each appraisal process must account for not only the output from the employee but also of:
Highlight the training needed for optimal performance.
Conduct self-evaluation as well as peer evaluation.
Evaluating other factors affecting performance, such as job satisfaction or motivation.
It might be difficult for managers to find the right questions to get workable data. In such a case, a good survey tool is what you need.
A good survey tool helps you send standardized questionnaires that capture the genuine opinions of your people. Want to make it even more effective? Opt for a pulse survey tool.
A pulse survey tool is simply the better version of your traditional feedback system. It is faster, quicker, easier to analyze, and will rarely result in survey fatigue.
Chances are that your traditional performance appraisal system needs an upgrade. You need to think out of the box to increase the performance of your employees and modernize your appraisal process effectively. Try to study what changes you can bring to your system. You can go through research papers, case studies, blogs, etc to improve your knowledge.
The bottom line is that you need to enhance the abilities of your employees for better performance in the long run.
Before you go, listen to this podcast know more about performance appraisal from Kyle Chetty, who was recently awarded the Young CHRO of the year and named Top 100 Inspirational leaders of 2021.
Do you have any more ideas, tips, and tricks to make the performance appraisal process more effective? Tell us in the comments below!