Recommendations to improve performance appraisals

January 6th, 2012

In a previous post we covered What do performance appraisals accomplish?.  That post discussed the perceptions that managers and subordinates have on the performance appraisal regarding what functions are fulfilled. It highlighted the contrast between intention and actual usege. Below are more in-depth recommendations to improve the effectiveness of performance appraisals.

Recommendations:

Make sure mgrs and subordinates understand the appraisal system:

The appraisal system should be explicitly described specific to the purpose of the appraisal. Organizations that clearly state the purpose for the appraisal reduce the confusion and ambiguity of the process. The goal should be that everyone knows why you are conducting appraisals. Think of it as purpose and procedure training.

Assess the effectiveness of your current system:

What are the intended functions of the current system? Recall that in What do performance appraisals accomplish?, managers and subordinates agreed that the system uphold some functions while falling short in other functions. Additionally, managers and subordinates have different needs. Identify them, and construct a questionnaire to assess the degree to which org members perceive the process to be effective.  Only then is the organization in position to develop a strategy to address shortcomings.

Appraisal skills training for your managers is a must:

It can reasonably be concluded that the ability of the supervisor to skillfully appraise his/her subordinate is critical to an effective appraisal. Training must focus on helping managers develop specific appraisal skills and confidence in their ability to effectively evaluate others. Skills should include (each of these could be a book on their own):

  1. Goal setting
  2. Communicating performance standards
  3. Observing subordinate performance
  4. Coaching and providing feedback
  5. Completing the rating form
  6. Conducting the appraisal review

Increase managers willingness to conduct effective appraisals

Primary causes of appraisal ineffectiveness fall squarely on the manager’s shoulder. It’s the harsh truth, but organizations should take more steps to facilitate. Offer refresher trainings, or training on the skills mentioned in the previous bullet. In short, arm or prepare managers to best carry out effective appraisals.

Start with effective performance planning

Planning is required to set the stage for effective appraisals. The majority of subordinates cited unclear performance standards as a cause of ineffective appraisals. Meaningful and accurate evaluation and feedback requires clear goals be established beforehand. Therefore a large part of the process should be devoted to determining what actions need to be taken in the future. It is harder to correct the results of poor planning than it is to plan correctly at the beginning.

Make informal appraisals ongoing activity

Annual appraisals are only as effective as what happens during the rest of the work year. Managers can increase the effectiveness by scheduling periodic, informal appraisals with subordinates on a regular basis. Mini-appraisals encourage honest communication, give the manager an opportunity to monitor employee progress, provide employee with an ongoing source of feedback, and address minor problems before they build or snowball. This can be difficult to maintain throughout the year as workloads pile up. However, when systems and structures are put in place, they can help ensure commitment to ongoing activity. Here’s how Point to Performance can help.

Provide resources necessary to link pay to performance

Linking rewards to performance appraisal results has been found to be one of the most unclear and controversial issues. However, this value proposition or selling point is frequently made for the appraisal. Few managers and subordinates believe the system effectively linked pay to performance. When the following happens, the system will be viewed as a sham.

  1. Changes in pay drive ratings instead ratings driving pay
  2. Does not allow for differentiation among various levels of contribution to the organization

When this happens, appraisal process loses its ability to have a positive effect on employee motivation instead creates a lack of trust in the appraisal process, which can undermine the potential for the system to effectively fulfill other functions. In short, define performance and contribution and reward them.

Use Anniversary dates to stagger appraisals

Conducting appraisals can be burdensome. Not only do managers have project or client work to do but also the administrative and internal work. To provide managers time to conduct more effective appraisals, encourage the staggering of appraisals throughout the year. This reduces the difficulty of manager’s having to conduct numerous appraisals in condensed period, which is a serious threat to the effectiveness of the process.

What have we learned from this performance appraisal review? Using a feedback structure, here’s what we can take away:

STOP: assuming they are motivational or lead to performance or better relationship between the manager and subordinate, dwelling on negatives.

START: involving employees more into the process, evaluating the actual process/system, giving feedback more often.

CONTINUE: clarifying performance and goals, getting input from employees about their job, discussing employee development.

What else would you start, stop, or continue with the performance appraisal?

Reference:

Longnecker, C., and Nykodym, N. (1996). Public Sector Performance Appraisal Effectiveness: A Case Study.  Public Personnel Management, 25, 151- 164.

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