Performance appraisals are usually not enjoyed by managers nor employees. They can, however, be very helpful to those same managers or employees if prepared and conducted correctly. They are also helpful if used as a positive tool to assist employees, not punish employees.
Smaller companies do tend to keep the process informal, but this should not translate into poor record keeping and lack of follow-up. As a company grows, it becomes quickly necessary to formalise the process.
What are the six steps in a performance appraisal?
There are generally six main steps in the performance appraisal process. The steps are:
Measurement of Performance
How do you conduct staff performance appraisals?
Starting with step 1, it is vital to set and clarify standards of performance that are fully aligned to the company’s strategic goals.
Moving onto step 2. Goal setting is done jointly by setting goals that are measurable. These, too, must be aligned to the company’s strategic direction. In addition, these must be aligned to the job analysis and the job description.
The performance standards and the jointly set goals must be clear, and they must be objective. Both, or all, parties must be able to understand them and be able to individually measure them individually.
The manager must have crystal understanding of what their expectations are of their employee in terms of work performance. Only then are they able to correctly and effectively communicate these expectations to their employees. With both parties clearly understanding the expectations, it creates an easy and amicable next step.
This next step is the reaching of a mutual agreement on the specific job performance requirements, how it will be measured, and that the appraisal will be based on their performance against these agreed measurements.
Personnel / H.R. departments are usually the ones that set up performance standards of employees in larger companies.
The measurement of performance is step 3, which determines what the employee’s actual performance was in predefined areas, general areas and specialist areas if relevant. The appraiser should take great care of how they obtained information on the performance. They should also be concerned about observing themselves and about how they are measuring as well as being certain they measure the correct part of the performance.
These performance measurements are discussed with the employees as their input to these measurements is vital.
This feeds directly into step 4, which is the comparison. This fourth step acknowledges the agreed final measurement of the performance and compares it against the standards or business benchmarks.
Together with the employee, the personnel manager or direct manager notes the deviation between standards or business benchmarks and the performance of the employee. The standards and business benchmarks must be clearly understood by the employee before you can proceed to the fifth step in the process of the appraisal with the employee.
Step 5 of the performance appraisal process, viz. discussion, can occur simultaneously with step 4. The discussion, however, is usually clearer and more focussed if step 4 is fully completed first and step 5 is executed sequentially.
The discussion of the appraisal with the employee is an important part of any type of appraisal, and good management skills and EQ are important here. The discussion can have negative consequences, and if not handled correctly, this can damage an employee’s future performance. Suppose this performance appraisal is part of a disciplinary hearing, preferably called performance management. In that case, it is especially important that management does not become part of the problem of low productivity, for example.
The discussion, however, can also have positive motivational consequences whereby the manager praises performance, contribution to the company and to the team. It is also beneficial for the manager to explain how seemingly unmeasured performances (e.g. helping others with their work) is noticed and contributes to overall measurements.
The toughest part of an assessment is when an employee’s contribution is insufficient yet they are performing at the best of their ability. In a standard performance appraisal, this outcome would then need to feed into a different process, viz. performance management process, whereby the staff member is potentially redeployed into another position. Their inability to execute the job means that the manager has done a poor job in hiring and should not sit fully on the shoulders of the employee, if at all.
The comprehensive discussion will lead into step 6 which covers the setting and agreement of any corrective action required. The agreed corrective action is also initiated in the final step via different methods. There are two high-level types of actions. One type is immediate action which is where the manager deals mainly with symptoms. The second type is where a process is put into place to seek out the causes of poor performance or, for example, an agreed set of appointments are put into place with a therapist, training officer etc.
Some managers refer to the “immediate corrective action” as ‘putting out fires’, whereas the second type of action is a medium to long term treatment or action plan.
You will recognise immediate action as it corrects something immediate e.g. a slow computer, insufficient remote data, and gets things back on track quickly and will minimal effort or intervention.