Do you look forward to completing your employees' performance appraisal? Are employees invigorated and inspired after receiving a review? If your experience is similar to the vast majority of employers, your answer to both probably is "no." The annual employee performance appraisal has long been a standard management tool. But research repeatedly highlights the many ways the traditional review process fails both employees and employers. Learn alternative, more effective best practices for reviewing, rewarding and guiding employee performance.
What Employee Performance Appraisals Are Meant to Accomplish
There are certain aspects that all employee performance appraisals have in common – to assist both the employer and the employee in understanding what’s being evaluated, how it’s being evaluated, and of course, how the employee has fared in each measured performance area, such as:
- Clear expectations regarding production
- Attention to the personal development of the employee and their own goals
- Dedicated assistance to help an employee reach those goals
- Provides written or otherwise documented proof that the employee understands their position, which protects both employer and employee
- A method for developing a plan to help a struggling employee improve their performance
- Transparency regarding how employees are promoted, paid, and recognized for their efforts
While all of these aspects are done with good intentions, it’s only human nature for bias and to rear its ugly head at times. For instance, if a certain manager and employee have a history of miscommunication, that manager probably shouldn’t be the one to perform that employee’s performance appraisal. But miscommunication and bias are not the only shortcomings of traditional employee appraisal methods.
How the Conventional Employee Performance Appraisal Falls Short
“I can’t wait for my performance appraisal this afternoon!”
…said no employee ever.
Management doesn’t exactly enjoy the process, either. In fact, giving a performance appraisal is the second least favorite aspect of a manager’s job – just behind having to fire someone.
Let that sink in for a moment.
A process that should be about assisting an employee and confidence-building is dreaded by both parties – but this is because traditional employee performance appraisal processes are flawed on a fundamental level.
In the traditional method, once every year managers are provided a form by HR on which to describe the performance of an employee. Some companies even have the employee fill out a similar form evaluating their own performance that will be shared with management either at or prior to the evaluation.
Because management doesn’t keep running notes, these forms are filled out by memory, which means what has occurred most recently is what the employee is most likely judged on. What does this mean for employees? They’re being evaluated based on the opinion of a manager, rather than hard data. A true evaluation by management would include notes taken throughout the year and follow-up after each subsequent event (good or bad) to be valid.
But instead, most organizations ask managers to judge employees on abstract concepts, such as:
- Performance excellence
- Achievement oriented
What could be done to more adequately evaluate employees that would make all sides happy?
Providing More Effective and Meaningful Appraisal of Employee Performance
If you’re concerned that your appraisal methods are missing the mark, you might need to turn the spotlight around, evaluate your current performance review methods, and modify your processes where necessary.
Look over your current review methods and processes. Wherever you can tone something up, do so. For instance:
- Design a format for performance evaluations that’s shared with all staff members prior to any evaluations. Employees then have a better grasp of what constitutes a bad, good, or fantastic employee in your eyes. Topics that should be covered in the evaluation are:
- Goals and their results
- Behavior and competency
- Areas to further develop
- Design a specific set of steps that employees can follow on the way to meeting their goals. Employees should have input as to what each team’s goals are and how best to achieve them. When deciding on the steps that will make it into the overall review, make sure goals are both aligned with your company objectives and will result in the desired outcome.
- Take notes! Any lapses or achievements should all be written down as close to the time of the event as possible. Relying on memories to conduct a review isn’t fair to you or your employee. If you implement a system that tracks employee conduct and performance, you’ll have hard data you can use come review time.
- Consider monthly or quarterly reviews. Reviewing your employees’ performance only once per year doesn’t allow for correcting mistakes as they happen, and it also doesn’t allow you to praise those employees who reach a personal or company milestone while the air is still fresh with success.
- Get feedback. It’s not a good idea to place a review square on the shoulders of management – if the review isn’t favorable, it can be difficult to present and difficult to be on the receiving end. By gathering input from others in the department, it’s less of a one-to-one approach. This method also allows self-reflection among coworkers. Company successes, even the minor ones, are more apparent to all concerned – not just upper management.
- Share the performance review before the actual meeting. A review meeting can distress some employees, especially if they’re uncertain what’s going to be said. Providing the employee with their review documents prior to the actual meeting lets them review the information and arrive to the appraisal meeting with ideas regarding how they can improve.
- Have a discussion, don’t give a lecture. The actual performance meeting should be a productive discussion in which your employee is given the opportunity to speak more, and more openly. The conversation should be positive, even if there are negative aspects of the performance review – remember, this is about reinforcing the employee’s accomplishments and paving the way towards their success.
Employee Recognition and Rewards as Part of Performance Management
Implementing a rewards program in conjunction with your employee performance appraisals gives your employees concrete reasons to improve. To design a successful rewards system, you should keep these things in mind:
Involve your employees
If you involve your employees in the design phase of the rewards system, not only will you get some great ideas, but your employees will feel a bit more vested in the company. Additionally, each member of the staff will know exactly what they have to do to reach a specific rewards level.
Rewards should reflect company goals
Reward employees whose performance or behavior directly impacts strategic goals or company revenue. Reward tangible efforts, such as ‘highest sales’ – don’t reward for intangible items such as ‘takes initiative’ or ‘innovative thinking’, because some employees might not understand the criteria.
Armed with these forward-thinking review ideas, you can foster an entire company of winners.