Conducting performance appraisals is highly beneficial to employers because, while giving you a fair idea of how every employee is operating, they’re also a great way of measuring an individual’s potential.

Well-conducted performance appraisals are motivational for your workforce. Moreover, by identifying how to improve the quality of an individual’s work, you can improve their job performance and identify areas for development.

Taking place at least once a year – though more commonly twice a year – appraisals offer employers the opportunity to spend quality time away from the rush of the office to listen to the views of their staff members. This should happen regularly anyway, but the formal structure and process helps to encourage this practice.

If conducted with integrity, staff performance appraisals can help to build up mutual trust, which ultimately bonds a team. These evaluations are also a great opportunity to look forward, and set goals and objectives for the year ahead.

Make a success of appraisals

When thinking about how to conduct an effective appraisal for your staff, keep the following in mind:

  • Ensure management is fully committed to the idea of appraisals and thoroughly define what the process does and does not entail

  • Monitor assessment schemes effectively and update any methods after a few years

  • Provide training to those carrying out appraisals to ensure that they are fair and follow a structure

  • Keep the whole process straightforward for staff

  • Consult with managers and staff prior to its introduction

Conducting the appraisal

The golden rules for the conduct of the performance appraisal itself:

  • Everything should be shown and shared – both negative and positive

  • The final report should be finalised in conjunction with those being appraised be signed off

  • The person being appraised should make a large contribution, and therefore have buy-in, in the appraisal

To ensure the whole process does not stagnate in the longer term, there should also be a regular confidential survey to find out what people actually think of the current process, as it exists at that point in time.

Methods of assessment

Two of the most popular methods of assessment are outlined below.

The 360-degree review

360-degree feedback is gathered from different members of an employee’s work circle and includes self-evaluation. Along with peers, the employee’s direct reports and managers, clients, contractors and other related parties can be asked to give feedback.

The feedback is anonymous to encourage complete honesty. The survey asks questions on areas such as: customer focus, teamwork, communication, leadership, technical know-how and ethics.

To conduct a successful 360-degree review:

  • Ensure that all employees know why the 360-degree survey is being carried out and don’t exclude anyone

  • Assure respondents that their anonymity is guaranteed

  • Create a tailored survey or feedback form

  • Collect feedback from a representative group of between 10 to 20 people, making sure to include the employee’s peers, direct reports and superiors

  • Ask the employee to complete their own survey for a broader view

  • Ensure that respondents have been working with the employee for at least six months

  • Compile and analyse feedback data and generate a summary of the data to discuss during the employee’s annual and half-year performance review

  • Use the data to identify behavioural patterns and perceptions trends

  • Provide positive, constructive criticism and don’t focus on negative findings as these are individual perceptions

  • Ensure that both the organisation and employee learn from the experience and that both work towards positive improvements

Once feedback is collected, results can be compared between the individual’s self-rating. And the ratings given by others can be used as the basis for both formal promotion assessments, salary negotiation and informal development conversations.

Psychometric testing

Psychometric tests and questionnaires are structured, systematic ways of evaluating how people perform on tasks or react to different situations. Although most commonly used to assess candidates’ abilities, psychometric testing is also a useful tool in improving organisational effectiveness through the development of existing teams and individuals. There are generally two types:

  • Questionnaires assessing your personality and values

  • Aptitude, cognitive, ability or intelligence tests

Whichever method you decide on, a performance appraisal should be primarily focused on development.

While it’s important to reflect on areas for improvement, those factors should be used to provide guidance on what the employee can do moving forward to achieve their objectives and contribute towards the company’s goals.

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