Best Practices: Performance Appraisal

In the old model, performance appraisal tended to be one-way, adversarial, oriented toward the past and universally despised by all. In the new model, performance appraisal:

Involves an ongoing process of planning, goal-setting, feedback and performance review.

Is an ongoing series of discussions between supervisor and employee rather than an annual event?

Focuses on the future more than the past.

Focuses on improving employee performance and career development rather than employees’ mistakes.

Is used as a tool to build trust, open communication and better supervisor/employee relationships at all levels of the organization.

Performance Appraisal Best Practices

Companies with world-class performance appraisal systems generally engage in the following practices:

•  Make performance appraisal part of the culture.
•  Walk the talk. (The CEO must model the right performance appraisal behaviour with his or her direct reports).
•  Link performance appraisal to organizational objectives.
•  Invest in training and education.
•  Design the system for the unique needs of the organization.
•  Use performance appraisal to build relationships between supervisors and employees.
•  Use flexible, customized appraisal forms.
•  Separate the compensation conversation from performance review.

Implementing a Performance Management System

Implementing an effective performance management system requires four basic steps:

1. The planning session: Supervisor and employee mutually agree on the job responsibilities and goals and the measurement criteria.

2. Regular performance reviews: Supervisor and employee meet every one to two months to track progress against the goals.

3. Ongoing coaching for improvement: Supervisor and employee identify areas for improvement and supervisor provides additional coaching and resources.

4. A formal, year-end performance review: Supervisor and employee agree on performance versus expectations and plan for the next year.

Preparing for the Performance Review Session

Five-step process:

1. Review the objectives of the session: The primary objectives are to review performance over that previous period, discuss any “leftover” issues and plan the future.’

2. Dual preparation: Both supervisor and employee should prepare a rough draft evaluation as well as lists of any questions or issues to be discussed.

3. Plan your approach: Identify what you want to learn from and convey to the employee. Create a list of open-ended questions to keep the employee talking during the session.

4. Check your attitude: Are you doing the review because you feel obligated or because your view it as part of the performance management process?

5. Select the right time and place: Plan at least one hour of uninterrupted time preferably outside your office, with no distractions or interruptions.

Creating a Customized Appraisal Form

Avoid standardized performance appraisal forms. Instead, create your own customized form that:

•  Fits the unique needs of your organization and your performance appraisal system.
•  Properly documents job-based understandings that develop between supervisor and employee.
•  Provides easy-to-reference information to properly guide the future development of the employee.
•  Is highly flexible.
•  Focuses more on the future than the past.

Conclusion

Evaluating individual work performance is a form of control because it ties performance feedback to rewards and corrective actions. Employee evaluation is an on-going process; taking place informally every day in the organization performance appraisal is a formal, structured system that compares employee performance to established standards. Assessment of job performance is shared with  employees being appraised through one of several primary methods of performance appraisals. Elements in performance appraisal methods are tailored to the organization’s employees, jobs, and structure. They include objective criteria for measuring employee performance and ratings that summarize how well the employee is doing. Successful appraisal methods have clearly defined and explicitly communicated standards or expectations of employee performance on the job. Performance appraisals seek to meet specific objectives. They include tell and sell, tell and listen, problem solving, and mixed model. It is used for employee development purposes. The supervisor does not offer evaluation but lets the employee decide his or her weak areas and works with the employee to develop an action plan for improvement. Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Aside from formal traditional (annual, six-monthly, quarterly, or monthly) performance appraisals, there are many different methods of performance evaluation. The use of any of these methods depends on the purpose of the evaluation, the individual, the assessor, and the environment.

After employee selection, performance appraisal is arguably the most important management tool a farm employer has at his disposal. The performance appraisal, when properly carried out, can help to fine tune and reward the performance of present employees. In this chapter we: 1. discuss the purpose for the performance appraisal, 2. introduce the negotiated performance appraisal approach, and 3. talk about the steps to achieving a worthwhile traditional performance appraisal. Base on the information provided by the organizations on their performance appraisal systems, it can be concluded that the most of the organizations have initiated changes in their performance management systems in order to improve service delivery and organizational efficiency. In particular, the setting of the individual goals that are aligned with the objectives of the organization has been developed in the most organizations. However, this practice can be improved or further developed in some of them. Key objectives of performance appraisals include: 1. validating selection and other management or cultural practices; 2. helping employees understand and take responsibility for their performance; and 3. making decisions about pay or promotions. Important steps to obtaining useful traditional appraisals include determining the type of data to be collected as well as who will conduct the appraisal, establishing a rating philosophy, overcoming typical rating deficiencies, creating a rating instrument, and engaging the employee in making decisions on future performance changes. An effective negotiated performance appraisal helps the employee take additional ownership for both continuing effective performance and improving weak areas. Employee goals set through performance appraisals should be difficult but achievable, as goals that are overly ambitious are doomed for failure. Some employees tend to boycott their own progress by setting impossible goals to achieve. Finally, employees want to know what you think of their work. Letting workers know that you have noticed their efforts goes a long way towards having a more motivated workforce. Performance appraisal is concerned with setting objectives for individuals, monitoring progress towards these objectives on a regular basis in our atmosphere of trust and cooperation between the appraiser and the apprise. Well designed appraisal systems benefit the organization, managers and the individuals in different ways and the needs to fulfill certain key objectives if they are to be successful. Appraisal systems should be designed to focus employees on the both of their short and long-term objectives and career goals. It is also important to be awareness of the problems associated with the performances appraisal system. However, in the context of cultural change and on the basis of a robust performance appraisal system, this issue should be overcome. Related to this is the broadening of the appraisal base and the move to multiple assessor appraisals and committee reviews in a number of organizations, which would provide staff members with the opportunity to respond in case of disagreement. The idea that competencies are the foundation for effective performance in any job or position is widespread in all the organizations of the common system. Accordingly, an increasing number of organizations have recently developed competency frameworks, including core and functional competencies. Client orientation, with a few exceptions, has not been widely developed. Here again, the issue would be overcome if cultural change is effective and the leadership role of managers strengthened. A few organizations of the common system have included the accountability of managers as a key element of the new performance culture. In these organizations, all managers and staff with supervisory responsibility are held accountable for the effective use of the performance appraisal system as a management tool. In practice, the manager is responsible for matching performance at the department/unit and individual levels, and for the measurement and interpretation of goal achievement and related corrective actions. An exemplary performance agreement should lie at the heart of the rigorous management of individual performance. The development of this agreement would be based on dialogue between the manager and staff member. It would draw its coherence from the work plans and budget of the department or unit, the job description of the staff member and the competency framework of the organization. It would identify objectives that are specific, measurable, agreed, realistic and time-bound. A range of organizations have taken the necessary steps to move towards linking pay to performance, regardless of the related pay system (i.e., broad banding system or the current salary structure). However, it is clear that the need for cultural change is a major imperative. Organizations are conscious of this prerequisite and have worked (or are working) towards changing organizational cultures at all levels to emphasize results, performance and competitiveness.