How to improve performance appraisals

Improve performance appraisals

For some time, there has been an upward trend in which companies have been choosing to leave performance appraisals as part of their talent management strategies behind.

On the one hand, it’s understandable why this is.

In an article by SHRM, the following reasons are discussed:

  • 95% of managers are dissatisfied with performance appraisals;
  • 90% of HR professionals believe that appraisals are inaccurate;
  • Supervisors tend to find them time-consuming and believe that appraisals fail at motivating employees; and
  • Employees feel that they don’t reward high performers or deal with poor performers
  • Employees also cite other problems – for example, they believe that reviews can be disrespectful and untimely.

The silver lining to performance appraisals

In spite of the reasons that some might have steered away from performance reviews, many companies – perhaps yours included – still rely on these platforms to connect with employees, offer feedback, and plan for the future.

In this light, performance appraisals can successfully underpin your broader HR strategy. The question is whether the review process is being carried out in a way that motivates employees, helps you retain top performers, and aligns with your organizational objectives.

Perhaps you’re looking to understand how to take the review experience up a few notches and maximize the benefit of carrying out performance appraisals. How can you ensure that they are valuable and rewarding for both your employees and your organization as a whole?

Before we dive into the ways that you can improve performance appraisals, let’s take another quick look at the difference between these reviews, performance management and performance improvement plans, and how they all link together.

A recap on the difference between performance appraisals and performance management

Performance appraisals are typically held on a semi-regular basis, usually annually, and are essentially done to evaluate or reflect on an employee’s performance. This approach zooms in on the individual, their contribution to the company, their achievements and development, or areas where attention is needed.

By nature, performance appraisals tend to focus on what the employee has accomplished in the past, leading up to the point of the performance review. They normally delve into components such as collaboration and teamwork, problem-solving, work quality and adherence to deadlines, to name a few aspects.

As mentioned earlier, performance appraisals may slot in with a broader HR strategy or performance management strategy.

Performance management, on the other hand, is not a standalone event but rather focuses on the entire employee lifecycle (including onboarding, integration, training, career development and continuous feedback) as an overarching strategy that helps employers establish a work environment where employees can perform at their best.

Rather than being reactive, this approach is proactive and shifts the focus to dealing with matters as they happen instead of waiting for a formal review. As we’ve previously discussed, real-time feedback is an effective strategy as it takes place on an ongoing basis, meaning that behavior can be rewarded or corrected as soon as possible.

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Five ways managers can improve performance appraisals

With a well-thought-out strategy in place, you can improve your organization’s performance appraisals and turn them into experiences that boost employee morale, help you retain top performers, and support your overarching performance management strategy.

1. Make the process clear to employees

To avoid any surprises (which have the potential to break down trust among employees) and to ensure that managers and employees have sufficient time to prepare for an appraisal, it’s important for new and existing staff to be made aware of the evaluation process and when appraisals will take place well ahead of the time.

You may choose to communicate this to employees at the start of the year, giving them the opportunity to plan ahead, pose questions, and work towards your organizational objectives in their individual capacity.

2. Use the appraisal document as a conversation starter

It’s no secret that appraisals can bring up some negative feelings. Giving your employees their appraisal document ahead of the meeting allows them the opportunity to process the information in private and to gather their thoughts about points they would like to discuss.

When it comes time to meet, use the document to break the ice, if necessary, and get conversation flowing. A well-constructed appraisal document (see example here) outlines the objectives and outcomes of particular tasks, and provides the employee with comments from their manager. With this in place, conversation becomes easier to navigate, especially when discussing uncomfortable points. Most importantly, however, it should be a two-way discussion, not a ‘lecture’.

3. Keep channels of communication open

As we often say, communication between managers and employees shouldn’t be limited to a performance appraisal, held only once a year. To begin with, you may want to aim to hold performance reviews once a quarter instead, making the formal ‘check-in’ less intimidating and more conducive to keeping up with employees’ progress.

Building on this, it’s important for organizations to establish and maintain a culture of open communication, whereby employees receive real-time feedback and are comfortable to approach their managers to discuss matters. Read more about the benefits of real-time feedback here.

4. Use the platform to put growth opportunities into place

As we’ve previously discussed, modern employees are motivated by the opportunity to learn, grow, and advance in their careers. Performance appraisals can be a great platform where employees’ potential can be acknowledged, and their career objectives discussed.

In other words, place a new spin on the performance appraisal – rather than focusing only on the employee’s performance to date, look at their future growth at your organization and how you can help them achieve their aims through career mapping, continuous learning, or internal gig opportunities.

5. Turn the experience into a positive one

Ultimately, performance appraisals don’t need to be the dreaded experience that they’re often thought to be. By connecting with employees more regularly, trust is more likely to be gained and with that, morale is boosted. When employees know that they’re on the right track; that they have room to learn, innovate and grow, and feel safe sharing thoughts or asking for help, they feel more confident about their progress and contribution to the company.

This in turn has the potential to alleviate the pressure often associated with performance appraisals. How can this be achieved? Ultimately, much of the experience rests on your company culture. By establishing open, two-way communication channels, offering real-time feedback (including acknowledging achievements and showing gratitude), supporting employees in their growth, and aligning individuals’ goals with company objectives, you’ll be setting a positive tone that will more than likely be experienced during and beyond the confines of performance appraisals.

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