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To many organisations, performance appraisals are considered a necessary evil. Many organisations and employees dread performance appraisals, often resulting in conflict and tension between managers and their direct reports. However, it doesn't need to be like this. When conducted well, performance appraisals should strengthen the relationship between managers and direct reports, not weaken it.

Performance appraisals should be considered an opportunity to recognise (and reward) high performance and commitment, or to provide valuable support to people who are struggling.

In this article, we will outline the best practices for conducting effective performance appraisals, minimising the probability of conflict while increasing the likelihood of personal development resulting from feedback.

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What is a performance appraisal?

A performance appraisal is a structured process for assessing and evaluating an employee's job performance against predetermined criteria. It involves feedback on accomplishments, strengths, and areas needing improvement, facilitating communication between employees and supervisors to enhance professional development, set goals, and make informed decisions regarding promotions or training opportunities.

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Give appraisals same time every year

Consistency is key when it comes to performance appraisals. Employees need to know what to expect and when to expect it. By conducting performance appraisals at the same time every year, you establish a routine that employees can rely on, which helps reduce anxiety and stress associated with the process. Employees will be better prepared, have their documentation ready, and be more likely to engage in meaningful conversations about their performance.

Conducting performance appraisals at the same time every year allows for a more objective evaluation of an employee's performance. If performance appraisals are conducted haphazardly, it's easier for biases to seep in, whether intentional or not. By establishing a routine, you can ensure that every employee is evaluated based on the same standards, and there's less room for subjective evaluations.

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Additionally, conducting performance appraisals at the same time every year helps to create a sense of accountability for both employees and managers. Employees will know that they need to prepare for their evaluation, which incentivises them to work hard throughout the year. Managers, on the other hand, will be held accountable for their evaluations and the feedback they provide to employees. When everyone knows what to expect and when, it's easier to hold each other accountable and ensure that performance appraisals are taken seriously.

Lastly, conducting performance appraisals at the same time every year helps with tracking progress and identifying trends. By evaluating employee performance on an annual basis, you can identify trends in areas such as employee development, productivity, and performance. You can use this information to make data-driven decisions about promotions, training, and development opportunities.

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Provide feedback throughout the year

While conducting performance appraisals at the same time every year is important, it's equally important to provide feedback throughout the year. Waiting until the end of the year to provide feedback can be detrimental to employee morale and development. Regular feedback helps employees understand how they're doing, what they can improve on, and where they stand in relation to their goals.

Providing feedback throughout the year helps employees stay motivated and engaged. Employees want to know how they're doing, and waiting until the end of the year to provide feedback can be demotivating. Regular feedback helps employees understand how their work contributes to the organisation's goals, and it helps them see the impact of their contributions. This helps keep them engaged and motivated to do their best work. Regular feedback also helps employees develop their skills and improve their performance.

"By providing feedback on a regular basis, managers can help employees identify areas for improvement and provide resources and support to help them develop their skills. This can help employees feel more confident in their abilities and improve their performance over time."

- Ben Schwencke

Providing feedback throughout the year also helps managers better understand their employees and their work. By providing feedback on a regular basis, managers can gain a better understanding of what their employees are working on, what their strengths and weaknesses are, and what support they need to be successful. This can help managers make more informed decisions about promotions, training, and development opportunities.

Most importantly, providing feedback throughout the year helps ensure that there are no surprises during the annual performance appraisal. When managers provide regular feedback, employees should have a good understanding of how they're doing and what to expect during their performance appraisal. This can help reduce anxiety and stress associated with performance appraisals and make them more productive and meaningful.

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Discuss “development needs”, not failures

When providing feedback to employees, it's important to frame it positively and focus on development needs rather than failures. Framing feedback positively can help employees feel more motivated and engaged, and it can help create a culture of continuous improvement.

Focusing on development needs helps employees understand how they can improve their skills and abilities to achieve their goals. It's important to provide specific and actionable feedback that focuses on what employees can do to improve their performance, rather than what they did wrong. This helps employees feel more supported in their development and encourages them to take ownership of their growth.

Framing feedback positively also helps create a more positive and productive work environment. When employees feel supported in their development and receive positive feedback, they are more likely to feel engaged and motivated. This can help improve overall productivity and performance.

Additionally, framing feedback positively helps build trust and stronger relationships between managers and employees. When managers approach feedback from a positive and supportive perspective, employees are more likely to view their feedback as helpful and constructive. This can improve communication and collaboration within the team, and help create a more positive work environment.

Finally, framing feedback positively helps ensure that employees feel valued and respected. When feedback is framed positively, employees feel like their contributions are appreciated and that their work is important to the organisation. This can help improve employee retention and attract top talent to the organisation.

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Combine with 360 degree feedback

In addition to top down manager reviews, using 360 degree feedback can be a powerful tool to support the process. 360 degree feedback involves collecting feedback from an employee's manager, peers, and direct reports, providing a well-rounded view of their performance.

Using 360 degree feedback in performance appraisals can provide a more complete picture of an employee's strengths and weaknesses. By gathering feedback from multiple sources, managers can gain insights into an employee's performance that they may not have been aware of otherwise. This can help managers provide more accurate and meaningful feedback to employees, which can help them improve their performance.

"Using 360 degree feedback can also help identify areas for improvement that may not have been apparent from a traditional performance appraisal."

- Ben Schwencke

Peers and direct reports may have insights into an employee's performance that their manager may not have been aware of. This can help identify blind spots and provide opportunities for employee development.

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Furthermore, using 360 degree feedback can help reduce bias and increase objectivity in performance appraisals. Traditional performance appraisals can be subject to biases, such as the halo effect, where an employee's overall impression of a person influences their evaluation. Using 360 degree feedback can provide a more objective evaluation of an employee's performance, as feedback is collected from multiple sources.

Lastly, using 360 degree feedback can help foster a culture of continuous improvement. By gathering feedback from multiple sources, employees can gain a better understanding of their performance and how they can improve. This can help create a culture where feedback is valued, and employees are encouraged to develop their skills and improve their performance over time.

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Agree on a personal development plan

One of the most critical outcomes of a performance appraisal is the creation of a personal development plan. A personal development plan outlines the areas in which an employee wants to develop their skills, knowledge, and abilities to achieve their career goals. It's important to create a personal development plan based on the feedback received during the performance appraisal to ensure that the plan is tailored to the employee's needs and aligns with the organisation's goals.

Creating a personal development plan helps employees take ownership of their development and career progression. It gives them a clear roadmap of the skills they need to develop and the steps they need to take to achieve their goals. This can help increase motivation and engagement, as employees feel empowered to take control of their career development.

Furthermore, creating a personal development plan helps align employee goals with organisational goals. When employees develop skills that align with the organisation's goals, they become more valuable to the organisation. This can help increase employee retention and improve overall performance.

It's important to ensure that both the manager and the employee agree on the personal development plan. This helps ensure that the plan is realistic and achievable, and that the employee has the resources and support they need to succeed. When both the manager and employee are on the same page, it's easier to track progress and make adjustments to the plan as needed.

Regularly reviewing and updating the personal development plan is critical to its success. Managers should schedule regular check-ins with employees to review progress and provide feedback. This helps ensure that the plan is on track and that the employee is getting the support they need to achieve their goals.

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Take ownership of development needs

As a manager, it's essential to take ownership of the development needs of your employees. While employees have a responsibility to develop their skills and abilities, it's the manager's responsibility to provide the necessary resources and support to help them achieve their goals. It's important to ensure that employees are not blamed for underperformance, but rather, that managers take responsibility for their development needs.

Blaming employees for underperformance can be demotivating and undermine trust between the manager and the employee. Instead, managers should approach underperformance as an opportunity for growth and development. By taking ownership of the development needs of the employee, managers can identify the root causes of underperformance and provide the necessary resources and support to help the employee improve.

It's important to have open and honest conversations with employees about their development needs. This includes identifying areas where the employee needs to develop their skills and abilities, as well as providing feedback on areas where the employee is excelling. By providing specific and actionable feedback, managers can help employees understand how they can improve their performance.

Furthermore, managers should provide the necessary resources and support to help employees achieve their development goals. This includes providing training and development opportunities, coaching and mentoring, and access to tools and resources that can help them succeed. When employees feel supported in their development, they are more likely to be engaged and motivated to improve their performance.

Therefore, managers should work with employees to create a personal development plan that aligns with both the employee's goals and the organisation's goals. This helps ensure that employees are developing the skills and abilities that are most relevant to their job and career progression. It also helps align employee goals with organisational goals, which can improve overall performance and productivity.

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Summary

Performance appraisals are a difficult and sometimes controversial practice that can be challenging to get right. Many organisations eschew performance appraisals altogether, finding them to be awkward and unpleasant. However, when done well, performance appraisals ensure accountability for both the manager and the employee. When best practices are followed, and the employee's autonomy is respected, both parties should leave a performance review feeling better than when they entered, regardless of the employee's performance throughout the year. High performers should feel appreciated and recognised, highlighting that their contributions have been noticed. Low performers should feel listened to and supported, with the necessary support systems put in place to upskill them.

If your organisation is facing capability issues with staff, Test Partnership's suite of assessments can be used to identify potential mismatches early in the selection process. In particular, our cognitive ability tests and behavioural assessments can rapidly identify future top performers, as well as flag any potential low performers in your applicant pool. For more information on our suite of assessments, please contact us or register for a free trial.

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