The Performance Appraisal System: Part 2 of Effective Employee Performance Management

A formal Performance Appraisal System is a necessity in a growing and successful business or organization. It demonstrates a consistency of understanding and formal communication of what is expected, what is applauded, and what is not acceptable. Everyone is on the same page: senior management, yourself, and the appraised employee. The Performance Appraisal evaluation should follow directly from an accumulation of all the items and notes amassed for the year in the Performance Management process. The filling of forms should be straight from your notes, because the "thought" behind the evaluations has already occurred and been documented. There should be no surprises for the employee in your evaluation.

The Performance Appraisal form(s) should follow a format that contains the following critical elements:

    • Personal attributes are the definition of the desired culture of the organization. Sometimes these are termed Key Accountabilities. They may be general, such as: job knowledge, quality and quantity of work, teamwork, attendance, safety, problem solving, cost control and communications. Others may be more specific and important in some organizations, or with some positions, and not others. These might include: negotiation and persuasive skills, creative ability, delegation, customer satisfaction, organization and HR skills.
    • Each attribute should be rated on a scale to allow quantification. For example, to rate the degree to which performance meets expectations, the following could be used: 1 = seldom/never; 2 = often but not always; 3 = always; 4 = often exceeds; and 5 = consistently exceeds.
    • Significant accomplishments and preset objectives should be documented and performance evaluated for professional and managerial positions. The quantification of rating, per objective or accomplishment, should use the same scale as above. More description and explanatory support is usually necessary in this section.
    • A section for Future Actions should also included, whether they are to improve on areas of shortcomings, set project objectives for the coming year, or for their professional development oriented. These can set the stage for improved performance, and may be a path towards promotion.
  • Performance Appraisal systems should be set up on an annual basis, usually (though not always) with the timing of the merit increase program. Thus, some are accomplished at the same time each year for all, and some are based upon anniversary date for each employee. The advantage to the former is primarily administrative. The advantage to the latter is that it requires the supervisor to be thinking "Performance Management" continuously. There is no subconscious incentive to only worry about it at one time each year. The critical factor is to be consistent and timely, no matter the schedule.

  • In addition, several features should be included in your methodology, including: employee self-evaluation prior to review; openness to modifying evaluations based upon discussions during review, and allowing employee to add comments in their own words to the official review forms.

In larger organizations, there may be specific modifications to the forms and/or processes based upon the job category or other characteristics. You could have separate Sales, Professional, Management and Non-Exempt (hourly) forms, with different personal attributes, and more or less focus on accomplishments and future actions for each.

What Kind of Experiences Have You Had With Performance Appraisals?

This is the fourth post in a multiple-part series entitled Tools and Tips for Successful Management and Leadership.

Coming Next: Are You a Conduit or a Filter?

(C) 2010 Martin Bergstedt. Used by permission
Report Card by AJ Cann
Calendar by Tomas Carillo


ehorahan's picture

Great post! It is important for an organization to have a consistant approach to performance reviews, and one that fully evaluates the employee.

Robert S's picture

These are all real good points and I agree with the structure and format laid out here. I have worked in companies with the whole range - from zero feedback to a highly organized system with deadlines and lots of infrastructure. In my experience, the commonality linking them all together is the lack of execution by the manager. Whether because he (for me it has always been a he) does not want to, or how to, or what - the end result is not effective. At least in the company with zero feedback structure I knew that help was not coming. I was prepared to be on my own. On a yearly basis, it always feels rushed (it was backed up against the yearly raise timing). Felt like I work hard all year for 15 minutes of "Hey, nice work." if I am lucky. But the most frustrating is working for a company with all of the steps described above in place. But when it comes to goal-setting and reviewing performance if the senior management does not support the process beyond checking it off a list as entered into the system - then it is a waste of time. If the goals are copy-pasted into everyone's forms and half of the review is going over the "philosophy of the process" it is a waste of time for everyone in the room. Better off just checking the box and moving on in my opinion. The most success I have had (minus my manager during my co-op, who was quite possibly the best manager I have ever had) was seeking out a small group of mentor-like people to get advice or perspective from. This helps, but at the same time can only do so much since none of them truly can see inside my manager's or senior management's heads. This isn't good for me or the company in the long run. The advice is always to take initiative and seek out the feedback from peers and superiors, which is good. But at the same time I feel that there is only so much that can be done from below and support from the top is needed eventually. They are very busy, but need to commit some real time to do this part correctly.

mbergstedt's picture

Thanks for the comments, Elizabeth and Robert! Effective and timely application of whatever system is in place IS more critical than form and format. I am a big supporter of the "throughout the year" approach vs. the "all at once" method for the very reasons Robert mentions in his examples of "poor" execution. You may also have to "train" your employees to be effective in their involvement. Once, when I asked a subordinate (who was a manager himself) to perform a self-evaluation prior to the review meeting, he responded, "No, that's YOUR job!" I cut him some slack, though, when I found out that his previous boss' approach to the review was to slide a completed form across the desk, tell him to sign it, and then say, "You've been reviewed!" A lot of undoing need doing in that organization. Marty