Make Performance Appraisals Work for You

How to turn the annual review into an effective process to drive employee success

A recent poll by the San Francisco-based consulting firm Achievers revealed that 98% of employees thought that annual performance appraisals were unnecessary. This sentiment was found in many different industries, in the private and public sectors, and among managers and junior staff alike. Despite the general dissatisfaction with performance appraisals, they can in fact be useful when done right. They offer insight into an employee’s productivity, motivation, achievement, and potential. They can also act as guidelines—not just for a particular employee, but for the department as a whole, for charting goals and achievements.

The key is to make performance appraisals effective enough to provide an accurate employee-to-departmental analysis. Most of the frustration with reviews is due to the fact that they tend to be annual (How are you supposed to remember everything that happened in a whole year?), and that they are seen as a boring, pointless exercise imposed by HR on managers and staff.

Here are some things you can do to turn your review process around.

• Frequency: Your staff may cringe at this, but to make the performance review process better, you should do it more than once a year. People dread when review time rolls around, particularly because it implies looking back at an entire year of events, goals, milestones, achievements, etc. This clearly daunting task is enough to make most people want to hide under their desks. Having reviews more often—say quarterly—can help both managers and staff set more achievable goals (and ones they will still remember in three months, as opposed to a year).
• Purpose: The performance appraisal can have multiple purposes, and they can’t all be effectively achieved with one method. Cramming everything into one review can prove counterproductive and fruitless. Try developing different conversations for different purposes instead. For instance, encourage managers to set performance goals with their employees on a regular basis, and have them invite the employees to set their own goals. Separate reviews can also be set up to plan career advancement and chart potential raises and promotions.
• Flexibility: As with most things in life, performance appraisals are not one-size-fits-all. It’s important to develop a flexible framework so that managers can set and reset goals. Consider setting up a system for peer-to-peer reviews, which allow feedback to flow laterally.  This better reflects today’s corporate structures, which aren’t quite as top-down as they used to be. Also, set up informal as well as formal review processes, using online tools and other methods that encourage a feedback-rich environment.
• Tone: Employees respond better to constructive feedback, something the typical performance appraisal process often skips or flat-out works against. Make sure your reviews focus on giving praise and credit when it’s due, while also offering constructive feedback on ways to improve. This balance will help employees feel appreciated and inspired to work to improve their performance.

In considering this last tip, remember not to shy away from dealing with employees who exhibit poor performances. A well-run appraisal process can help you determine how best to help these employees improve.

When dealing with under-achievers, keep in mind the following tips.

• Addressing issues is best done at the time of the event, and not months later. This is also why it’s good to have more frequent reviews. If an employee is not performing well, allowing a year to go by before mentioning anything is ineffective and can end up costing the company. Address issues immediately when possible, or at least during your more frequent performance reviews.
• Encourage managers to nurture and build their employees’ skills, and not just focus on the bottom line. Share tools with them that can make this job easier, like information on seminars or workshops they can send their employees to, in order to improve their performance.
• Focus on the managers themselves. Investing in leadership development will help managers hire better employees and train, coach, and evaluate them so they can perform at their maximum potential.
• A poor performance may be indicative of various factors, so try to have a candid talk with employees in order to determine the best way for them to improve. This may be in the form of further training and re-qualification, so have a system in place to provide this. It can also be due to a lack of communication between the employee and management, so be prepared to open a dialogue.

Remember, everyone wants to succeed and perform well at their job. If an employee’s performance is poor, it may not necessarily be his or her fault. It’s important for the company to share the responsibility and offer ways to improve and help them find a better fit if possible.