Is your appraisal process working effectively?
Are you thinking of updating your performance appraisal process, or perhaps starting from scratch with a completely new appraisal process? Whatever you decide, this practical advice should help.
Key criteria when introducing a new Appraisal Process
Introducing a new appraisal process can be one of the most challenging assignments for an HR team. Here are some useful tips that should help;
Focus – When introducing a new appraisal process, be clear on what you want to achieve from it. At one extreme it may simply be an opportunity to discuss with employees how they think they are performing; at the other extreme, it may be a formalised performance appraisal process that’s linked to salary, bonus and potential promotion opportunities.
Objectivity – An effective appraisal process should encourage objectivity and fairness. The appraisal process should provide appraisers with a platform to use fact and evidence so that their comments are backed up with real observable examples of good or poor performance.
Download this essential Performance Appraisal Guide. A handy list of the key actions to take when preparing for the appraisal, during the appraisal meeting and throughout the year.
Simplicity – Effective appraisal processes are simple and straightforward. If the appraisal process is over complicated, appraisers and employees will lose the motivation to use it with any commitment or belief. It will become an effort to administrate and manage. If it’s an online appraisal process, it needs to be user friendly, easy to understand and well tested. If it’s a paper based process, it mustn’t be over elaborate or burdensome.
Openness – A new appraisal process should allow for openness and transparency between appraiser and employee, yet at the same time be confidential. Appraisees should feel that the appraisal process presents them with the opportunity to air their views or concerns and also to discuss achievements they consider to be worthy of note.
Credibility – Appraisees and appraisers must believe in the appraisal process. An appraisal system may fail if people don’t feel it is worth carrying out. To achieve credibility, it is helpful to involve both appraisers and appraisees in the development of the process, or at least to invite feedback from them during the development stage.
Consistency – Appraisees should feel that they are being treated fairly and on a par with their colleagues. An effective appraisal process should be designed around a consistent template. Appraisees should feel that they are being assessed against consistent criteria. This can be achieved through the development of competencies which relate either to the appraisees within the organisation as a whole or to previously identified work groups and / or seniority levels.
Confidentiality – It’s essential that your employees feel that their personal information is recorded and filed confidentially. If your appraisal process is online, staff should have their own personal login details with password protection.
Measurement – The new appraisal process should have fair and practical measurement criteria. This may be a numbered scoring system or it could be a system that uses descriptive words. Ideally, appraisers will work to a previously agreed and consistent benchmark relating to employee performance. This will help to alleviate any subjectivity due to some appraisers being generous with their scoring and others being less so.
Training – Senior managers must ensure that appraisers have training in the skills required to conduct a professional performance appraisal. Even if you have a first class appraisal process, it is unlikely to achieve its aims if your appraisers don’t know how to manage and run it effectively. Appraisees should also be briefed on the process, particularly if your appraisal system is designed to be ‘appraisee led’.
Development – The appraisal process should identify the personal development and training needs of appraisees. Appraisers should know how to use the system to cater for these needs and to coordinate the relevant assistance. This may take the form, for example, of a training course.
Objectives – An effective performance appraisal process ensures that appraisees understand clearly what they are expected to achieve in the coming year. Both the appraiser and the appraisee should be involved in this process. Appraisees are much more likely to be committed to achieving their objectives if they have played a part in the development process. Objectives should always be developed using the SMART Objectives criteria (Specific, Measurable, Achievable, Realistic and Time-based).
Record – A new appraisal process can only be effective if the information recorded is filed properly. Appraisal records will need to be accessed for reference. This may need to take place more often than just once annually because amendments may need to be made during the year to keep the appraisal up to date. For example, objectives may change and therefore require amending. Recording must of course be confidential and managed professionally.
Does your Performance Appraisal process just need updating rather than renewing?
Perhaps your appraisal process just needs tweaking? It has all the components that an effective process needs but it’s falling short for some reason …
Performance appraisal can be used for a number of reasons; giving and receiving feedback, coaching, setting goals and objectives, agreeing pay rises and bonuses, measuring performance, identifying training and personal development needs, boosting motivation and providing recognition.
However, some organisations expect all this to be achieved during one performance appraisal meeting at the end of the year. Is that realistic or is it asking too much of an appraiser (and employee)? Could this be why your appraisal process is falling short?
Often the performance appraisal meeting is met with dread, fear, anxiety or disillusionment by employee and sometimes even manager. An hour’s formal meeting is seemingly all it takes to analyse one year of an employee’s hard work, create a learning and development plan, set objectives for the following year and sometimes even set bonuses or pay rises. Often the information used is calculated using unreliable performance ratings or out of date statistics gathered from employee, manager and if using 360 degree feedback, other team members.
During our work as performance appraisal consultants, we often find that the reason the appraisal process is falling short is not so much to do with its structure but more to do with how the process is being managed.
So is there a better way of managing your Performance Appraisal process?
It’s true that people need and want to know how they’re doing and to understand the rationale that could influence their career development or pay, but is it really necessary to discuss so much and place so much emphasis on one or two meetings a year? This not only puts pressure on the ability of the manager but also on the relationship between the employee and the manager.
Surely the first step to re-thinking your performance appraisal process should be to consider an appraisal as a number of different processes. These processes could be divided into goals, coaching and development, feedback and recognition, remuneration, and motivation for example.
The key to managing these processes in a constructive way is to meet more regularly with employees to discuss performance. Often this is all that needs to change to ensure the process is successful. In the performance management field, this is often referred to as ‘social performance management’.
Social performance management fosters a supportive and collaborative work culture where your staff are primarily responsible for requesting their own feedback, not annually but daily in real-time. Feedback then becomes interactive, timely and focused. Deloitte is just one large organisation that’s been successfully employing this approach to performance management for some time now.
If you’re interested in reading more about this, have a look at our blog on Social Performance Management – It could be the alternative you’re looking for.