What You Need to Know About Performance Appraisals
As we begin to wrap up 2023 and look ahead to 2024, performance evaluations are a great way to offer transparency and help employees understand how their contributions were seen in the organization. Performance evaluations provide a structured opportunity to provide employees with specific feedback, so they know where they stand and how to improve for the following year. Take a look at the SHRM article to learn more about performance appraisals and common issues employers face.
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Performance Appraisals
PURPOSE
Performance appraisals are periodic evaluations of an employee's job performance against a set of expectations and goals. The results of this process are used to make informed decisions for both the individual employee and the organization in areas such as compensation, promotion, employee development, staffing and succession planning, among others.
LEGAL REQUIREMENT
While private-sector employers are not required to have performance appraisal systems, federal agencies are required to have such systems under 5 CFR 430.204. States may have similar laws for public employers.
POLICY
Whether formal or informal, a performance review policy can be used to set employee expectations and maintain transparency about the process.
GOAL SETTING
Regardless of what type of appraisal system is used, a common first step in the process is to set goals for each employee. These goals should relate to and support the departmental and divisional goals that have been formed to further the organizational strategy.
RATING SCALE
While rating scales vary from alphabetic and numeric to those with descriptive phrases (e.g., "Meets Expectations"), they are all used to indicate a qualitative assessment of an employee's performance and to measure how individual employees measure up against others.
APPRAISAL METHODS
There are several methods commonly used to assess employee performance and strategically internalize the results. These include management by objectives, forced distribution, ranking, graphic rating scales and behaviorally anchored rating scales. Employers may choose one method for all employees or may vary the method by job level, such as line workers versus managers or executives.
SELF-ASSESSMENT
Many appraisal systems include an opportunity for employees to provide a self-assessment of their own performance. This can promote an honest performance-feedback discussion and help ensure that an employee's contributions are not overlooked by a busy manager.
TRAINING
All employees should be trained on the format and process used by the employer to appraise performance to ensure understanding and fairness and to promote transparency.
TIMING
Annual performance appraisals are traditionally the most common, with many employers also conducting midyear appraisals to reduce any rating surprises for employees at year-end. Recent trends tend to favor continuous feedback and coaching, with less structure to the actual appraisal document.
CALIBRATION
Performance calibration is a process in which a group of managers come together to discuss the completed performance appraisals of team members with the goal of ensuring managers are using similar standards and criteria to evaluate and rate employee performance.
PERFORMANCE REVIEW MEETING
Once the appraisals are calibrated and ratings are set, the manager meets with each of his or her direct reports to discuss the appraisal and final rating, if applicable. Being prepared for the meeting and starting on time shows respect for the process and the employee.