How to Optimise Your Employee Performance Appraisal
Performance management entails a lot more than mere employee performance appraisal. A well-rounded performance appraisal needs to be a summary of a continuous year-round dialogue. If you focus only on the annual appraisal, it will create misunderstanding and lead to non-appreciation of the advantages of holistic performance management. An effective performance management process facilitates managers to measure and evaluate the individual performance of employees and improve the productivity levels. As per an appropriate performance management process, you as a manager should be able to:
- Align the everyday actions of your employees and align them with strategic business objectives of the organisation.
- Offer visibility and clarify the kind accountability expected from a performance perspective.
- Document performance at an individual level to support any career plans and remuneration related concerns.
- Focus towards the development of skills of employees.
- Create legal documents in order to support decisions and reduce disputes.
Significance of Performance Management
One of the main reasons to ensure that performance management processes at your end are functioning properly is to strengthen the connection between the strategic business goals and the day to day activities of your employees. When you set goals effectively, it includes timelines with the means to track the progress of your employees. It also helps you to figure out challenges, and thereby contribute towards the success of your employees and achieve the desired goals. If you can track the progress of your employees against their performance goals and objectives, it enables you to recognise and reward your employees duly for their performance. This leads to a sense of job satisfaction amongst your employees and thereby improves their productivity levels. It gives an immense satisfaction to employees when they perform well at their job and feel that they are making a significant contribution. To ensure your employees feel this way, you need to ensure they clearly understand their individual goals and also understand how they can contribute towards the organisation goals.
How to Improve the Performance Appraisal Process
- Define and Set Goals Clearly and Objectively
Firstly, write down your goals in an objective manner, and ensure they clearly communicate your strategic business objectives aligned with the individual employee goals. When you provide visibility to goals set by various departments across the organisation, it introduces deeper alignment. When you make your departmental goals accessible to all the managers, it ensures that there is no overlap, facilitates the members across departments to view where they support each other, reduces conflict and ensures that they are working together. A manager shares the overall goals of their department and then meets with the employees to figure out the individual goals and career plans. You as a manager need to set goals which are specific, measurable, achievable, relevant, and time time-bound (SMART Goals) to ensure effective tracking of the goals.
- Set an Actionable Plan
Once you have set the goals for your employees, you can get down to performance planning by sharing the objectives with your employees and formulating an actionable plan to guide them to achieve their goals successfully. You need to carry out performance planning by collaborating with the employees. Start off by providing the job description and then move on to job expectations. Clarify the expectations for each of these major areas. It is crucial to identify both long and short term goals along with an action plan defining how to achieve these goals. Communicate how you plan to measure their progress, as well as any challenges you might face in achieving these goals. If any of these challenges relate to knowledge, behaviour, or skills, you need to formulate a plan to overcome them via mentoring, training and so on. Using a performance development plan as a point of reference, hold regular check-ins to monitor progress, solve roadblocks, change goals and, re-evaluate any training and resource needs.
- Performance is a Continuous Process
As a manager, you need to ensure the process of setting goals, planning, monitoring performance, providing feedback and coaching is a continuous process. It should support the performance appraisal process and also support any kind of processes pertaining to learning and development as well as rewards. By ensuring that the performance monitoring is an ongoing activity, you can make necessary adjustments to performance planning based on the prevailing conditions.
- Improvise Productivity by Managing Goals Effectively
When you track the goals on a regular basis, it supports feedback as required, makes any adjustments to the performance places, deals with challenges, and prepare for any emergency in case of missed timelines. You need to ensure that you offer performance feedback unique to the progress of goals in a respectful manner. Your discussions relating to goals needs to be objective and supportive. Provide them with specific examples to help them comprehend and clearly focus on future improvements. It is also important that you patiently listen to the perspective of your employees and incorporate their suggestions into your plans.
- Collect Information from Multiple Sources
When you ensure to collect performance information from multiple sources instead of just one, it increases the objectivity and also ensures that all other factors that may impact performance. This information should include various kinds of objective data such as projects, sales reports, deadline reports, etc. It should also include feedback derived from personal observation, any other external or environmental factors, and documentation of the ongoing dialogue. Performance reviews also include employee self-evaluation. Apart from including self-assessment, you must also look for feedback from peers, subordinates, or managers around certain pre-identified areas. Then you need to compare all this against the employee’s self-evaluation. You must be objective while evaluating the performance of an employee. You may need to include certain checks and balances in your review to ensure objectivity. When you follow a consistent process across the organisation, it ensures fairness and objectivity. When you provide access to information, it facilitates transparency and the ability to validate the process.
- Importance of Documentation
Documentation is crucial to support decisions related to performance. Ensure that you maintain notes with the intention of sharing them with the employees. Document the details about a certain event and note down subsequent follow-ups. The performance log that you maintain as a manager is a record that you manage for every employee and certain crucial performance events. You can record successes, as well as any area which needs improvement. When you maintain this kind of detailed documentation, you can use it to support your performance decisions or ratings. The performance log also needs to be objective and based on observations and job-related behaviours such as achievements, successes, and any disciplinary actions taken.
- Train Your Managers Well
It’s not an easy task to manage the performance of another person requiring a number of different skill sets. Hence it may be necessary to train your managers well so that they feel confident and prepared to effectively accomplish all the tasks pertaining to performance management. This holds true especially for your newly promoted supervisors. Managers need to know the human psychology, how to motivate, develop, offer training, and how to handle conflicts. Apart from this, managers need to understand the different levels of ability, comfort, and experience of employees with their jobs, as it may need different levels of support, input, and supervision.
- The Employee Performance Review
The employee performance review needs to summarise all that has been discussed so far. Based on various factors such as job expectations, areas of contribution, previously discussed goals and methods of evaluation, the appraisals need to be a written confirmation of what has been discussed with the employee. The appraisal form needs to include the present project work, job responsibilities, goals, relevant competencies, and achievements. You can also refer to previous performance appraisal docs to complete the current performance appraisal process. The performance appraisal doc also needs to have a section for the employees to enter their comments and inputs. You should prepare well in advance for the appraisal meeting. Schedule an appointment with the employee and also ensure that the employee has all the information that he or she may need to prepare well for the meeting.
Start the discussion by focussing on the job requirements, strengths, and achievements. Approach the meeting with an open mind and be prepared with what you wish to discuss. You must also be prepared to listen to the viewpoint of your employees. Define the objective of the meeting and share an agenda with the employees. Keep your discussion factual oriented and summarise the key points at the end of the meeting. It is crucial to note that the employee will be asked if they are agreement with the discussion.
- Link Performance Management with Remuneration
Most organisations these days are linking performance to remuneration. This link can only be established when you have a sound performance management process in place which is fair and equitable in all aspects. When you share a clear documentation of the progress made by your employees against the performance expectations, it enables proper recognition when a job is done well. You can compensate in a number of ways such as via formal recognition events, informal public recognition, or sharing a private feedback. Ensure that you follow a consistent process across the organisation to generate a sense of fairness and thereby increase job satisfaction amongst employees.
- Encourage Participation
Ensure that you design your appraisal process correctly. The appraisal process needs to add value; else you will come across issues such as resistance and non-participation. Also, the performance appraisal process needs to be simple and efficient while adding appropriate value. You can have automatic reminders and scheduling tools in place to keep the process on track. It is also equally important to have the support of the upper-level management. Keep the culture of your organisation in mind while designing the appraisal review process. Last but not the least, you must consider having a mechanism to evaluate the process in itself. You can do so by conducting an annual survey, gathering manager feedback, having focus groups, or a combination of any of these methods.
Automating Performance Management
More organisations are adopting innovative technology to optimise their performance management practices through automation. They are moving to web-based technology which makes these systems quite affordable irrespective of the size of the organisation. These SaaS-based automated systems have fast implementation schedules requiring no IT support with ongoing upgrades. Having an automated system ensures that the performance management process is engineered with consistent best practices inside.