10 Steps for an Effective Performance Appraisal

Whether it’s a ‘routine’ performance review, or a more formal performance improvement plan meeting, it can be a foreboding experience, both for the manager and the employee. However, to get the most from these meetings from a business performance perspective and the employees’ personal development, managers need to handle the often sensitive subject areas with confidence and authority.

Below we examine 10 tips which help managers to make performance appraisals positive and motivational, and help them more confidently lead the meetings.

• 1 – Preparation – The key to an effective performance appraisal lies in the preparation by you, the manager. Performance reviews which are carried out with insufficient preparation will miss valuable opportunities for feedback and improvement.  At the very least, you should have prepared a list of key points to feedback and be clear how you are going to illustrate the points you plan to make to the employee. The more examples you can give and patterns you identify, the more your employee will understand and be able to act on the feedback.
• 2 – Goal setting – As part of your preparation for an effective performance appraisal, the most important element is the goal setting aspect. It is essential that your employee has absolute clarity on what is expected of their performance and is committed to these goals. These expectations need to be documented, with a written agreement from the employee. Subsequent discussions around performance should then refer back to these agreed actions.
• 3 – Clarity around evaluation – An effective performance appraisal should make clear exactly how you will evaluate the employee’s performance. Describe exactly what you are looking for from the employee and how you will evaluate their performance towards each goal. It’s equally important to explain the employee’s role in the evaluation process.
• 4 – Focus on the entire performance period – It can be very easy to let recent events affect your judgement of an employee’s performance. Instead, you should document occurrences during the whole period of time that the performance review covers. These could include positive occurrences like the timely completion of projects, as well as negative performance such as missed deadlines and situations which could have been dealt with more effectively.
• 5 – Advanced disclosure – If you or your organisation use a template form which you fill out in advance of the meeting, make this available to the employee before the review. This enables them to digest the key points prior to the meeting and prepare a coherent response. Without this advanced disclosure, any negative feedback is far more likely to be met with an emotional, rather than rational response. An emotionally charged performance review is far less productive than a rational discussion, where mitigating circumstances can be discussed coherently and taken into account.
• 6 – Include colleague feedback – An effective performance appraisal incorporates feedback from the employee’s manager, peers and direct reports. This can help put context around the points you are making and removes any perceived bias and helps provide an holistic point of view across the business, not just their manager’s. If your organisation doesn’t have a formal 360° feedback system, informal discussions with their close colleagues can provide valuable information.
• 7 – Focus on constructive feedback – Regardless of how much an employee wants to improve; no one wants to receive negative feedback from their manager. Whilst negative feedback focuses on what your employee is doing wrong, constructive feedback examines areas for improvement. Focusing on how some of their positive behaviours can help to overcome some ‘less positive’ performance is a far more effective method of motivating performance.
• 8 – Encourage 2 way dialogue – The word ‘conversation’ should define an effective performance appraisal. Your aim should be for the employee to be speaking for at least half of the review meeting. You can achieve this by asking some carefully placed questions such as; what do you hope to achieve at the company this year? How can I be a better manager? How regularly do you want to receive feedback? By encouraging 2 way dialogue, the employee is much more likely to feel motivated when they leave the meeting, rather than just having been lectured by their manager.
• 9 – Be trustworthy and helpful – The way that you approach the 2 way conversation can have a dramatic affect on the effectiveness of the appraisal. Your employee has to trust you and believe that you want to help improve their performance and make them a more valuable member of the team. You should make clear that you have the confidence in them to improve their performance. Believing they have the ability and the necessary support to improve is a hugely powerful motivator.
• 10 – Regular follow up – Performance reviews are often annual or twice yearly appraisals but this is not sufficient to keep motivation levels consistent for the vast majority of employees. You should schedule in regular one-to-one meetings on a monthly basis, where you revisit performance goals and review progress towards them. Not only will this help to sustain motivation, it can also help enhance the relationship with your employees and further build the bond of trust you have with them.

No performance appraisal process fits perfectly for every manager and every employee. However, following the above tips will help ensure that the process is a positive, rewarding, beneficial experience for both the manager and the employee.