Performance appraisals: a guide to your options

Performance appraisals guide

A performance appraisal is a means by which an employer evaluates the contribution, performance or relevant attributes of their employees. It is important in a number of ways, but the most obvious contribution it makes to an organization is in identifying the strengths and weaknesses of employees, making it possible to frame goals and objectives for individuals, and thereby improving performance and efficiency.

Any performance appraisal system, however, should be about more than grading employees or separating them into performers and non-performers. Properly introduced and operated, a good performance appraisal system will help to inform staff development, serve as a basis for hiring and training new employees, and provide useful insights when organizations attempt to restructure. It also has an obvious role to play in disciplinary matters and in negotiations around changes to pay and conditions.

There are a number of different types of performance appraisals, and when implementing such a system, any company will have to weigh up which type best fits with the culture they wish to promote, their budgetary constraints and the manner in which their business operates. The various forms of performance appraisal can be grouped into four categories:

Behavioral checklist

The behavioral checklist works by laying down a list of kinds of behavior that an employee should display in order to be considered effective. This method enables an employer to draw up tailored standards of behavior suitable to the organization and to the environment in which it operates, and has the advantage of focusing solely on the individual employee rather than comparing them to work colleagues, maximizing attention on individual development.

360 degree appraisal

This performance appraisal is the most effective at gathering information and evidence to draw up a profile of the employee. By drawing in feedback from managers, supervisors and team members, as well as assessing an employee’s basic performance, an employer can build an in-depth picture covering all aspects of their skill-set and behavior.

Management by objective

Management by objective is a widely-used performance appraisal system that emphasizes delivery of performance, and is most effective in those environments where clear targets can be set. It also has the advantage of being straightforward to operate. Under this system, managers and employees agree specific goals that can be achieved within a set time-frame and then measure achievement against those goals.

Psychological appraisals

Psychological appraisal methods look to go beyond merely measuring employee achievements against goals. These appraisal systems use a variety of methods to evaluate an individual’s intellectual and analytical skills, emotional traits and psychological profile, making it possible not just to weigh up their performance but to ensure that they are placed in the most appropriate job role or team.

A robust and effective performance appraisal system is a vital tool for both improving the performance of employees and for helping them to develop. Correctly implemented, such a system can help boost the self-esteem and effectiveness of employees, thereby improving the efficiency and productivity of the organization.

But remember, managing performance, whatever method is chosen, is a complex process made increasingly so by modern changes in the workplace. The rise of remote working, the fast pace and continuous changes in technology and the changing needs, wants and expectations of the modern workforce means a one size fits all approach cannot work.

Some organizations have gone as far as to do away with the performance appraisal process altogether. Accenture, one of the largest companies in the world with over 330,000 employees banished annual reviews in 2015 in favor of a more fluid system. Employees now receive timely feedback from their managers on an ongoing basis following assignments.

And Accenture are not alone – Deloitte, Microsoft, Adobe and Gap are other global organizations that have done away with the formal annual performance appraisal and replaced it with informal and frequent check-ins between managers and staff.

With companies such as these turning away from traditional annual reviews, perhaps a more modern and fluid approach is one worth considering too.

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