The Performance Appraisal Process

What does an effective performance appraisal process look like?

As I described in Chapter 1, an effective appraisal process begins with a performance-planning meeting where the manager and the individual discuss the upcoming year, set goals, review the competencies that the organization expects people to demonstrate, and identify the key job elements. They may also discuss the subordinate's development needs and goals in this hour-long meeting.

Over the course of the year the manager and the individual regularly talk about performance. They adjust objectives as priorities change and as goals are met. The manager solves performance problems if any arise and creates the conditions that motivate. She also conducts a midyear review to more formally discuss the individual's performance halfway through the annual cycle.

Performance assessment is the third phase of an effective performance appraisal process. The manager evaluates exactly how well the individual has performed in each area covered in the appraisal instrument, writes narrative descriptions of the performance, and assigns the appropriate ratings.

Once the performance appraisal form has been written, reviewed, and approved, the employee and the manager get together for the final phase of the process: performance review. They discuss the manager's evaluation of the individual's performance and come to an understanding of what was accomplished over the course of the year and how those accomplishments were evaluated. At the end of this meeting, they set a time to get together again to plan for the upcoming year, and the process begins anew.

We're getting ready to design a completely new performance appraisal system from scratch. Where should we start?

Here is a ten-step process that works well in developing a new performance appraisal system:

1. Get top management actively involved.

2. Establish the criteria for an ideal system.

3. Appoint an implementation team.

4. Design the form first.

5. Build your mission, vision, values, and core competencies into the form.

6. Ensure ongoing communication.

7. Train all appraisers.

8. Orient all appraisees.

9. Use the results.

10. Monitor and revise the program.

Tell Me More

Get top management actively involved. Without top management's commitment and visible support, no program can succeed. Top management must establish strategic plans, identify values and core competencies, appoint an appropriate implementation team, demonstrate the importance of performance management by being active participants in the process, and use appraisal results in management decisions.

Establish the criteria for an ideal system. Consider the needs of the four stakeholder groups of any appraisal system: Appraisers who must evaluate performance; appraisees whose performance is being assessed; human resources professionals who must administer the system; and the senior management group that must lead the organization into the future. Identifying their expectations at the start helps ensure their support once the system is finally designed. Ask each group: "What will it take for you to consider this system a smashing success?" Don't settle for less.

Appoint an implementation team. This task forcea diagonal slice of appraisers and appraisees from different levels and functions in the organizationis responsible for developing appraisal forms, policies, and procedures and assuring successful deployment. Effective implementation teams usually divide themselves into two working task forces:

1. Policies, Practices, Procedures (3P). This task force is responsible for designing the appraisal forms and recommending policies and procedures. They also develop measurement systems to make sure the system is operating properly once it has been installed.

2. Understanding, Support, Acceptance (USA). This team works as a mini-advertising agency, arranging communication plans and programs to ensure understanding and support by everyone who will be affected by the system.

Design the form first. The appraisal form is a lightning rod that will attract everyone's attention. Design the form early and get lots of feedback on it. Don't believe people who tell you that the form isn't important. They're wrong.

Build your mission, vision, values, and core competencies into the form. Performance appraisal is a means, not an end. The real objective of any performance management system is to make sure that the company's strategic plan and vision and values are communicated and achieved. Core competencies expected of all organization members should be included, described, and assessed. If your mission statement isn't clearly visible in the performance appraisal system, cynicism will likely result. Values become real only when people are held accountable for living up to them.

Ensure ongoing communication. Circulate drafts of the form and invite users to make recommendations. Consider using focus groups to review ongoing efforts. Keep the development process visible through announcements and house organ bulletins. Use surveys, float trial balloons, request suggestions. Remember the cardinal principle: People support what they help create.

Train all appraisers. Performance appraisal requires a multitude of skillsbehavioral observation and discrimination, goal setting, developing people, confronting unacceptable performance, persuading, problem solving, and planning. Unless appraiser training is universal and comprehensive, the program won't produce much. And don't ignore the most important requirement of all: the need for courage.

Orient all appraisees. The program's purposes and procedures must be explained in advanceenthusiasticallyto everyone who will be affected by it. Specific training should be provided if the performance management procedure requires self-appraisal, multilayer feedback, upward appraisal, or individual development planning.

Use the results. If the results of the performance appraisal are not visibly used in making promotion, salary, development, transfer, training, and termination decisions, people will realize that it's merely an exercise.

Monitor and revise the program. Audit the quality of appraisals, the extent to which the system is being used, and the extent to which the original objectives have been met. Provide feedback to management, appraisers, and appraisees. Train new appraisers as they are appointed to supervisory positions. Actively seek and incorporate suggestions for improvement.

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