Performance Appraisal

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What is a Performance Appraisal?

A performance appraisal is the periodic assessment of an employee’s job performance as measured by the competency expectations set out by the organization.

The performance assessment often includes both the core competencies required by the organization and also the competencies specific to the employee’s job.

The appraiser, often a supervisor or manager, will provide the employee with constructive, actionable feedback based on the assessment. This in turn provides the employee with the direction needed to improve and develop in their job.

Based on the feedback, a performance appraisal is also an opportunity for the organization to recognize employee achievements and future potential.

The Purpose of a Performance Appraisal

The purpose of a performance appraisal is two-fold: It helps the organization to determine the value and productivity that employees contribute, and it also helps employees to develop in their own roles.

Benefit for organization

Employee assessments can make a difference in the performance of an organization. They provide insight into how employees are contributing and enable organizations to: 

  • Identify where management can improve working conditions in order to increase productivity and work quality.
  • Address behavioral issues before they impact departmental productivity.
  • Encourage employees to contribute more by recognizing their talents and skills
  • Support employees in skill and career development
  • Improve strategic decision-making in situations that require layoffs, succession planning, or filling open roles internally

Benefit for employee

Performance appraisals are meant to provide a positive outcome for employees. The insights gained from assessing and discussing an employee’s performance can help:

  • Recognize and acknowledge the achievements and contributions made by an employee.
  • Recognize the opportunity for promotion or bonus.
  • Identify and support the need for additional training or education to continue career development.
  • Determine the specific areas where skills can be improved.
  • Motivate an employee and help them feel involved and invested in their career development.
  • Open discussion to an employee’s long-term goals.

How to organize a performance appraisal process

Conducting a performance review with an employee requires skill and training on the part of the appraiser. The negative perception that is often associated with the performance appraisal is due in part to a feeling of being criticized during the process.

A performance appraisal is meant to be the complete opposite. Often, the culprit is in the way the appraisal is conducted via the use of language.

The way the sender of a message uses language determines how the other person interprets the message once received. This can include tone of voice, choice of words, or even body language.

Because a performance appraisal is meant to provide constructive feedback, it is crucial that appropriate language and behavior are used in the process.

Human Resources (HR) are the support system for managers and supervisors to be trained in tactfully handling the appraisal process.

Performance Appraisal Examples

Let’s take a look at one example of a Manager speaking to an employee during a performance appraisal. Below are three versions of the same example.

Compare the difference in language and behavior and how it can change the end-result:

 

An appropriate appraisal example with mixed feedback

“We can start the review by looking at how each project went for you this quarter. Does that sound OK?

First, every project you have worked on in the last four months has met the expected deadline and were all within their budgets. I see one project here was even early. They were all implemented successfully.

Well done. You have succeeded in the criteria expected of a Project Manager here at ABC Company.

Let’s take a look at a few areas where you might be able to develop your project management skills further.

In Project A, B, and C, a few team members expressed that they were unsure what to begin working on in the first few meetings and felt that they were engaging in their tasks a bit late.

When they tried to express this in later meetings, they felt there was hostility towards them. For upcoming Projects D, E, and F, is there anything that can be done to get team members up and running more quickly?

Could more detailed task planning be completed prior to the project kick-off?”

Debrief:
This example removes the errors from the first example and puts them in a more constructive light.

  • The appraisal begins by involving the employee and making them feel like a valued part of the process.
  • The appraiser focuses on measurable outcomes, such as each individual project, instead of broad, baseless generalizations.
  • Positives are the focus of the assessment.
  • Areas for improvement are offered in a constructive and neutral format by referring to specific events in the employee’s day-to-day tasks.
  • The employee is given the opportunity to problem-solve the situation and contribute to their own sense of self-development.
  • Constructive solutions are offered so the employee has a clear idea on what they can do better next time.
 

An inappropriate negative appraisal example

“Let’s talk about some of the problems.

You are never proactive when it comes to the start of a new project. Things are left too late and there are often complaints.

I have heard that your attitude has been less than positive during project meetings.

You seem to have things going on at home right now, but they shouldn’t be intruding on your work.”

Debrief:

This example is extreme, but it conveys most of the errors that can occur in a performance review.

  • The appraisal begins with a negative. It has been shown that starting with the positives can set the tone for the appraisal and helps employees feel more receptive to feedback.
  • The appraiser speaks in a negative, accusatory language and bases the assessment on assumption instead of measured facts. An appraisal needs to be based on measured facts.
  • The appraiser makes the discussion personal; a performance review should remain focused on the contributions of the employee to the job and never be about the individual as a person.
  • Phrases like “you are” or “you always” are generalizations about the employee; a performance appraisal needs to be about specific contributions to specific job tasks.
 

An appropriate appraisal example for underperformers

“I wanted to talk to you today about your performance during the last quarter.

Looking at the completed project schedules and project debriefs here, I see that each of the five projects was kicked off late.

Team members reported having trouble getting the resources and information they needed to start and complete their tasks. Each project was delivered a week or more late and had considerable budget creep.

Project A was over by $7000. Project B was over by $9,000, for example. These budget overages were not authorized. 

I think we really have potential to turn this around and I really want to see you succeed.

The role of Project Manager requires you to kick-off projects on-time, make sure your team members have the resources they need, and it’s crucial that any budget issues or delays are discussed with myself or the other Manager.

For the upcoming projects this month, I’d like you to draft a project plan one week prior to any project kick-off. We can go over it together and figure out where the gaps might be.

Did you have any suggestions on how you might be able to improve the punctuality of your projects or effectiveness of how they are run?

Debrief:
This example deals with an employee who seems to be struggling. The appraiser unfortunately has a lot of negative feedback to work through, but has successfully done so using appropriate language, tone and examples:

  • The feedback does not use accusatory language or tone, nor does it focus on the person. This is especially important at the start of a performance review when the topic is being introduced. Being accusatory can make an employee feel uncomfortable, upset or defensive and set the wrong tone for the rest of the review. Comments should remain focused on the employee’s work.
  • The comments are constructive and specific. The appraiser uses specific examples with evidence to explain the poor performance and does not make general, unsubstantiated comments. Making general, broad comments like “Your projects have a lot of problems and are always late” are unfair as they cannot be proven. The tone also creates hostility and does not help the employee to solve the problem.
  • The appraiser offers a positive comment about improving the situation and also a specific solution to improve the performance. The point of a performance review is to motivate and help an employee, not cut them down.
  • The appraiser asks for the input of the employee on how to solve the problem. This empowers the employee to become more involved in their skill development and ends a negative review on a positive note.
 

The inflated appraisal example

“I don’t think we have too much to talk about today as everything seems just fine.

Your projects are always done on time and within budget. I’m sure you made the right decisions with your team to achieve all of that.

You and I definitely think alike when it comes to project management.

Keep up the great work.”

Debrief:
This example appears like a perfect performance appraisal, but it’s actually an example of how to inappropriate:

  • The feedback glosses over any specifics regarding the employee’s actual work and instead offers vague, inflated comments about everything being great. Feedback needs to refer to specific events.
  • Any mention of trouble on the team is ignored. A performance review needs to discuss performance issues before they become serious later on.
  • The appraiser compares the employee to himself. This could be referred to as the “halo effect”, where the appraiser allows one aspect of the employee to cloud his or her judgement.
  • Nobody is perfect; every appraisal should offer some form of improvement that the employee can work towards, whether it is honing a skill or learning a new skill.

Performance Appraisal Methods

There are many ways an organization can conduct a performance appraisal, owing to the countless different methods and strategies available.

In addition, each organization may have their own unique philosophy making an impact on the way the performance assessment is designed and conducted.

A performance review is often done annually or semi-annually at the minimum, but some organizations do them more often.

Let’s take a look at the basic structure of a performance appraisal, which is often the baseline used for different appraisal methods.

The appraisal process:

  1. The assessment process is usually facilitated by Human Resources, who assist managers and supervisors in conducting the individual appraisals within their departments.
  2. An assessment method should be established.
  3. Required competencies and job expectations need to be drafted for each employee.
  4. Individual appraisals on employee performance are conducted.
  5. A one on one interview is scheduled between the manager and employee to discuss the review.
  6. Future goals should be discussed between employee and manager.
  7. A signed-off version of the performance review is archived.
  8. Appraisal information is utilized by human resources for appropriate organizational purposes, such as reporting, promotions, bonuses or succession planning.

5 Popular Performance Appraisal Methods

There are some common and modern appraisal methods that many organizations gravitate towards, including:

1. Self-evaluation

In a self-evaluation assessment, employees first conduct their performance assessment on their own against a set list of criteria.

The pro is that the method helps employees prepare for their own performance assessment and it creates more dialogue in the official performance interview.

The con is that the process is subjective, and employees may struggle with either rating themselves too high or too low.

2. Behavioral checklist

A Yes or No checklist is provided against a series of traits. If the supervisor believes the employee has exhibited a trait, a YES is ticked.

If they feel the employee has not exhibited the trait, a NO is ticked off. If they are unsure, it can be left blank.

The pro is the simplicity of the format and its focus on actual work-relate tasks and behaviors (ie. no generalizing).

The con is that there is no detailed analysis or detail on how the employee is actually doing, nor does it discuss goals.

3. 360-degree feedback

This type of review includes not just the direct feedback from the manager and employee, but also from other team members and sources.

The review also includes character and leadership capabilities.

The pro is that it provides a bigger picture of an employee’s performance.

The con is that it runs the risk of taking in broad generalizations from outside sources who many not know how to provide constructive feedback.

4. Ratings scale

A ratings scale is a common method of appraisal. It uses a set of pre-determined criteria that a manager uses to evaluate an employee against.

Each set of criteria is weighted so that a measured score can be calculated at the end of the review.

The pro is that the method can consider a wide variety of criteria, from specific job tasks to behavioral traits. The results can also be balanced thanks to the weighting system. This means that if an employee is not strong in a particularly minor area, it will not negatively impact the overall score.

The con of this method is the possible misunderstanding of what is a good result and what is a poor result; managers need to be clear in explaining the rating system.

5. Management by objectives

This type of assessment is a newer method that is gaining in popularity. It involves the employee and manager agreeing to a set of attainable performance goals that the employee will strive to achieve over a given period of time.

At the next review period, the goals and how they have been met are reviewed, whilst new goals are created.

The pro of this method is that it creates dialogue between the employee and employer and is empowering in terms of personal career development.

The con is that it risks overlooking organizational performance competencies that should be considered.