9.5: Performance Appraisal

Performance appraisals are structured evaluations that assess an employee’s job performance, contributions, and achievements over a defined period. The process typically includes reviewing goals, providing constructive feedback, and identifying areas for growth or development. Employees often seek clarity from their managers on three key points: what is expected of them, how well they are meeting those expectations, and how they can enhance their performance. While effective managers provide ongoing feedback, formal appraisals are generally conducted annually or semiannually. These evaluations may involve methods such as self-assessments, peer reviews, and manager evaluations. When implemented effectively, performance appraisals promote open communication, boost employee motivation, and inform decisions regarding promotions, salary adjustments, and career development. Appraisal systems differ between organizations and vary based on the employee’s role and level within the company.

The Basic Three-Step Performance Appraisal Process:

1. Before managers can measure performance, they must set goals and performance expectations and specify the criteria (such as quality of work, quantity of work, dependability, and initiative) that they’ll use to measure performance.
2. At the end of a specified time period, managers complete written evaluations that rate employee performance according to the predetermined criteria.
3. Managers then meet with each employee to discuss the evaluation. Jointly, they suggest ways in which the employee can improve performance, which might include further training and development.

It sounds fairly simple, but why do so many managers report that, except for firing people, giving performance appraisals is their least favourite task?^[1]

Purpose

Performance appraisals serve multiple purposes:

• For a manager and employee to discuss the employee’s performance and to set future goals and performance expectations
• To help identify and discuss appropriate training and career-development opportunities for an employee
• To create formal documentation of the evaluation that can be used for salary, promotion, demotion, or dismissal purposes
• To help organizations recognize and reward high-performing employees
• To align the employee’s goals with organizational objectives

As for disadvantages, most stem from the fact that appraisals are often used to determine salaries for the upcoming year. Consequently, meetings to discuss performance tend to take on an entirely different dimension: the manager may appear judgmental (rather than supportive), and the employee may get defensive. This adversarial atmosphere can make many managers not only uncomfortable with the task but also less likely to give honest feedback. (They may give higher marks in order to avoid delving into critical evaluations.) HR professionals disagree about whether performance appraisals should be linked to pay increases. Some experts argue that the connection eliminates the manager’s opportunity to use the appraisal to improve an employee’s performance. Others maintain that it increases employee satisfaction with the process and distributes raises on the basis of effort and results.^[2]

360-Degree and Upward Feedback

Instead of being evaluated by one person, how would you like to be evaluated by several people, not only those above you in the organization but those below and beside you? The approach is called 360-degree feedback, and the purpose is to ensure that employees (mostly managers) get feedback from all directions—from supervisors, reporting subordinates, coworkers, and even customers. If it’s conducted correctly, this technique furnishes managers with a range of insights into their performance in a number of roles. Some experts, however, regard the 360-degree approach as too cumbersome.^[3]

“It should be no surprise that tech companies like Google and Netflix are among the adherents to 360 feedback. Another use case from our own roster of clients is the Nissan Corporation, where 360 feedback took off among its North American engineering team. It all started with a senior manager wanting to improve their leadership skills by taking the G360 Survey for Managers. Before long, 360 feedback fever had spread to other teams and different departments.”^[4]

Media Attributions

“Serious ethnic psychotherapist listening to clients complains” by Alex Green, used under the Pexels license.