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What is a Performance Appraisal, and How Can You Get the Most From It?

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We’re doing performance reviews all wrong.

Rather than the typical let’s-have-a-tense-meeting-every-six-months (you know, the method that stresses out you, your employees, and gives very little meaningful data or actionable feedback), studies have shown that people prefer and benefit from ongoing, consistent information on how they’re doing. Most people agree that the traditional format of performance appraisal is going the way of the dodo.

So what IS a performance appraisal?

At its core, a performance appraisal (also known as a performance review) is an evaluation of an employee’s performance at work. The appraisal may contain observations from peers or supervisors, as well as hard data from trackable metrics.

The traditional method of performance appraisal is exactly as I said above, with a yearly or six month meeting and then a return to the usual. The more progressive companies out there have moved on to the ongoing performance review method, a style that allows for better performance with smaller bits of feedback over a longer period. The easiest way to accomplish this stylistic overhaul is through performance appraisal software, which can handle the day-to-day data tracking for you.

That’s all good to know. Now how do you make something meaningful out of that information? To start, here are fifteen quick tips to help you (and your employees!) get the most out of your performance appraisals.

1. Encourage self-appraisal

Want your work done for you? Of course you do!

One way to achieve that is to assign self-appraisals to your appraisees. While they are not a replacement for your own evaluation, a self-appraisal can tell you valuable information about the self-awareness and openness to criticism your employee has,

That said, you might want to make them optional. A lot of people loathe them, primarily because they force extra work on already busy people, and are at a complicated level of introspection (do you want to underrate yourself and seem humble or overrate yourself in the hopes of making yourself look good?).

Personally, I think that an occasional self-evaluation is a good way to encourage self-examination and gives you a valuable insight into how your employees view themselves in relation to their peers. Keep it limited, but don’t be afraid to go for it!

2. Focus on the performance, not the person

As an HR specialist, you already know how tricky performance reviews can be in terms of language legality. There is a lot of potential for an employee to view feedback, justly or not, as discriminatory or personal. Take care to direct critique away from the traits and keep them focused on results.

Personal problems are at their most difficult in terms of culture fit. Choose your words carefully; if someone has an attitude that needs adjustment, focus your language on the impact, rather than the action itself. For instance, if an employee’s peers think they’re careless, make a note that they could be more deliberate and take their time more on projects, rather than just repeating the comment of them being careless. Deliberate actions are an actionable change, while carelessness is a trait.

3. Keep morale in mind

You’ve already heard all about the “sandwich method” of giving criticism, so I’m not going to rehash it here. That said, you should try to end the performance review with a positive takeaway. If you aren’t going to end the meeting by firing your employee, then they should walk away feeling empowered rather than let down. A good way to achieve this is to discuss their potential; you can read more on how to achieve that in tip number seven.

Don’t forget that morale is so valuable that it directly impacts your bottom line. Data shows that engaged, happy employees result in as much as 200% bottom-line improvement over unhappy, disengaged employees.

4. Make problem-solving a partner project

If you bring up a problem with an employee in a performance review, who’s problem is it? Once you’ve gone over the issue with your employee, the problem becomes theirs to fix; your job is done, right?

But here’s the thing about performance problems in the workplace—if you don’t directly help deal with them, they very quickly become your problem.

If you don’t approach performance problems as something that call for ongoing attention and help to deal with, you’ll find yourself with a lap full of problems in short order. Don’t drop your employee after the appraisal; keep working with them to solve their issues together.

5. Admit you don’t know everything

You don’t know everything, nor are you required to in a performance appraisal. When you go through the downsides of an employee’s performance review, keep in mind that you can never have the whole picture. You only have a limited view based on workplace data. Your employee could have a lot going on outside of work hours that they choose not to disclose. There may be other elements at play even in the workplace that you’re unaware of. Show compassion by acknowledging that.

“I’m sure I don’t know all the details but-”

“From my perspective it seems like-”

“I’m seeing X but I’d like to know what I’m missing.”

These are all simple ways to dial down the pressure and give your employee space to respond to the critique. Another way you can combat not having the full picture is by taking a holistic approach to performance appraisal. Try 360 degree feedback software to start out.

6. Never assume buy-in

So you’ve had the meeting, you feel like you really got through to your employee, and you’re sure that they feel charged to tune up their performance and kick ass!

No! Don’t give in to dangerous assumptions. You never want to risk mistaking your own enthusiasm for someone else’s.

To make sure that an enthusiasm spillover isn’t the case, check back as frequently with someone who seems excited as you would with someone who seemed to reject everything you evaluated. A good guideline is a follow-up email by the end of the week, and a check in email or meeting planned two weeks later. Having a set check-in schedule will help keep everyone on the same page.

At best it will reinforce the desire to improve, and at worst it will catch anyone who would have otherwise slipped through the cracks.

7. Put emphasis on the potential

Every member of your staff has potential. Even if they aren’t doing well, they still have potential. If they didn’t, you wouldn’t have hired them, right? Sometimes it can just take a little more work to unlock that potential. It’s not a bad idea to remind your employees of that, especially at the end of an otherwise not-so-stellar performance review. It can be a morale booster for sure.

Consider your wording when giving suggestions for the future. An employee who’s been struggling with an issue such as communication might feel demoralized by a list of what they’ve done wrong, so be sure to pick them back up by adding where you see avenues for growth. (“Your emails, on the other hand, are always very clear and your peers appreciate that.”) If your feedback highs and lows are in the same area, all the better, but it doesn’t need to be. (“You’re always great at professional development courses, so you can make your  issue better faster than most people if we set up a formal course.”) The most important part of this kind of feedback is being truthful and upfront.

8. Describe the problem

“You’re not doing as well as you could be.” Ok. So what? Evaluations like these tell your employee next to nothing. They give no indication of what the problem is, what needs fixing, or how to approach solving the issue.

If your employee has a problem, you need to come up with a specific, concrete explanation of what they’re doing wrong.

Some concrete examples include,

  • “Your email etiquette is lacking when you forget to sign your name.”
  • “You have a tendency to turn in projects several hours after close of business on their due date.”
  • “Your documents tend to be formatted for Word, but they don’t transport cleanly to Google Docs, so we need to change how you approach formatting.”

These are examples of specific, detailed criticisms that can be turned into plans for actions.

9. Develop an improvement plan

So you know what your employee’s problem is, you’ve gone over ways to make it better, and everyone’s on board.

Now what?

How can you track their improvement?

The most solid way is to put in a performance tracking plan and follow it together. Most ongoing performance appraisal software has some function for tracking project or objective performance, so check out a few systems to find one that matches your workplace style.

A good start might be with IBM Kenexa or Oracle Taleo, the two most popular performance review software on the market today.

10. Look back to look forward

Think of performance reviews as a timeline.

Look at the past first, and go over ways your employee has improved over time. That doesn’t mean you need to dissect every month since they began at the company, but you should at least look over trends and tendencies through time.

From there, you can look to the future, with specific improvements and career goals in place.

11. Use other people

There’s nothing worse than showing up unprepared for a meeting you’re expected to lead, a fact that is especially true of performance reviews. But sometimes you can read all the reports and data in the world and still not feel prepared to go over all the details of an employee’s performance.

Here is where you need other people.

Reach out to your employee’s network in the office. Talk to their teammates, talk to their supervisors, talk to the people who sit the next desk over. See what they have to say. Are they turning in reports on time? Do they blast their music distractingly loud? Try and find out the impression of an employee through those around them. Create a survey if you need to.

Include questions regarding the employee’s ability to meet deadlines, how communicative they are, how they respond to feedback from peers, and other such questions to get a well-rounded snapshot.

12. Beware the halo

The halo effect is often applied to HR situations. We may find ourselves inclined to give the benefit of the doubt to people we already like because of their appearance or personality. But here the halo effect has an additional application.

When filling out a performance rating sheet, try to avoid the desire to fill in every section with the same answer. Ranking employees “very good” (or 5/5 or very bad or any other set extreme) on a few sections may trick your brain into giving that same ranking for every aspect of the evaluation. To avoid the halo, consider putting the paper down and doing something else for a few minutes before returning to the next question. It will help keep cognitive bias out of your brain.

13. Evaluate the performance, not the attitude

“But Halden, how is performance vs. attitude different from point number two?” Simple: point two is about the language you choose. This point is about not conflating ability to perform with culture fit. Culture fit is vital in many companies. If not everyone shares the same (or at least similar) goals, there will be friction that slows down the company’s growth as a whole.

However, not every company places a high value on culture fit. In many workplaces, culture fit is far less important than the ability to perform. If you have one such company and your employee is great at their job, it shouldn’t matter if they don’t always work with a smile or attend optional bonding exercises. As long as their behavior isn’t causing a real problem, let go and find other areas to focus on.

14. Specificity is everything (especially if the employee is doing well)

Creating a list of ways a slipping employee can do better is easy. Finding something so say to an employee whose doing well is a lot harder. Taking a cop-out and saying, “Keep up the good work!” is tempting but ultimately not helpful.

You should have at least three specific pieces of information for each and every employee you review. Failing to provide actionable information, or at least concrete recognition of jobs well done, will make even the best employee’s morale sink.

15. Consider OKRs

Looking for a way to make your goal-setting portion of the performance appraisal a little more kick? Look into Objective and Key Results. A complex form of step-by-step stretch goal setting, OKRs are used by companies like Google, LinkedIn, Spotify, and Capterra. It makes for a structured way to set improvement goals, no matter how your employees are performing.

What performance appraisal tips do you swear by?

Everyone has their own performance appraisal methods and secrets. What are yours? And how do you think you could still stand to grow? Hit us up in the comments below or check out our performance appraisal software database to find new ways to make your appraisals even better.

Looking for Performance Appraisal software? Check out Capterra's list of the best Performance Appraisal software solutions.

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About the Author

Halden Ingwersen

Halden Ingwersen writes about HR and eLearning at Capterra. She’s a graduate of Agnes Scott College and a TEDx presenter. You can follow her on Twitter @CapterraHalden, just don’t get her started about her zombie survival plan.

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