Set up an Appraisal System and Performance Management (appraisal) System

Introduction

As a company grows, so does its need for more formal or structured management systems.  Managing the performance of people in the company becomes increasingly important.

This article guides managers and HR professionals through some of the steps to implementing an appraisal or performance management system.

What is an appraisal?

Appraisal:
- The act or an instance of appraising.
- An assessment of the worth or quality of a person

An appraisal (what ever it is called in your company) is a face-to-face (one to one) discussion where an individuals work is discussed, reviewed, and appraised by another. Usually the line manager following an agreed and understood common structure or framework.

Usually, line managers conduct the appraisals of their staff. In some companies a peers review is used.

Line managers are increasingly being appraised by their staff through the use of 360 degree appraisal. This is where feedback is obtained from the an individuals manager, peers and direct reports.

Typically an appraisal process focuses on behaviours and performance results. The process strives to improve motivation, individual growth, and performance of the appraisee.

Performance appraisals should be conducted at least once a year, although many argue that the more regular (quarterly as a minimum) the easier and more value the process adds.

Performance Management – An Overview

Performance management is a systematic process by which a company involves its employees with their line manager (and often members of a group), in the identification and implementation of organisational effectiveness improvements in the accomplishment of the objectives of the company.

Employee performance management typically includes:

* Planning work and setting performance and work standard expectations
* Continually monitoring and providing feedback on performance
* Developing the capacity to perform
* Regularly rating performance in a summary and agreed format
* Recognising and rewarding good performance.

Planning
In any highly effective company, much of the work is planned and scheduled in advance.

Planning means setting performance expectations and goals for teams and individuals to focus their efforts toward achieving agreed company objectives.

Getting employees actively involved in the planning process will help them understand and engage with the objectives of the company. This includes but is not limited to:
* What needs to be done
* Why it needs to be done
* How well it should be done

Monitoring
In any highly effective company, assignments and projects are monitored on a regular and appropriate basis.

Effective monitoring means consistently measuring performance and providing appropriate and ongoing feedback on progress toward reaching the agreed objectives.

Developing
In any highly effective coompany, the development needs of employees are evaluated and addressed in a systematic yet individual way.

Developing in this context means increasing the capacity to perform through developmental activities such as: training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods.

Providing employees with effective training and developmental opportunities encourages good performance, strengthens job-related skills and competencies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.

Rating
From time to time, most company’s find it useful to summarise employee performance.

Using a consistent framework, this can be helpful for looking at and comparing performance over time or among various employees.

Companys need to know who their best performers are.

Rewarding
Rewarding means recognising employees, individually and as members of teams, for their performance and acknowledging their contributions to the company’s objectives.
A fundamental principle of effective management is that all behaviour is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative.

Making performance management easy

To be effective (and easy) performance appraisals should be an on going process rather than a one a year barrier for all concerned.

For managers and team leaders that continuously feedback as part of their managerial style, the annual performance appraisal becomes easy and an affirmation of a positive working relationship. Instead of a drudgery merely to be tolerated to meet a departmental goal of having them all completed.

Where performance appraisals are an annual event, they tend to create a great deal of anxiety in both the line manager and individual.

Much of the emotion and reluctance concerning this event centres around a fear of the unknown, usually on both sides of the desk.

Employees often feel uncomfortable because they believe they have not received much feedback during the year or because they are unsure about the performance criteria on which they are being reviewed.

Line managers, on the other hand, sometimes are equally reluctant with their role, the subjectivity of the evaluation, or their employee’s possible reactions.

A combination of these triggers often leads to a less than satisfactory result for everyone involved.

It is often said that performance appraisals are defined as an event at which managers get no sleep the night before and employees get no sleep the night after.

So if performance appraisals so often are difficult, uncomfortable, and unsatisfactory, what can be done about it?

When objectives are set on a 12-month timetable, people tend to agree to them and then promptly get back to work.

This is natural. Routine activity always takes precedence over non routine activity, and before anyone realises what happened, three months… six months have gone by and no one has thought about the annual objectives.

In fact, company priorities typically change so significantly in that period that those annual objectives are not as relevant as when they were set.

A Solution?
Do it little and often. Its like the old saying “How do you eat an elephant..? One bite at a time”.

Set objectives which are ‘real’ and relevant ‘now’ (SMARTer objectives)

Having monthly one-to-ones with the ‘big’ one just being a summary of the other meetings. It is a lot less stressful and increases the opportunity of adding value to the relationship as well as developing motivation and performance all round.

For performance appraisals to be effective they must be ‘owned’ by the individual and the line manager – not a central HR department (although they may be responsible for developing and maintaining a MINIMUM STANDARD)


check out our free resource on appraisals in our Resource Zone

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About Mike Morrison

Mike Morrison is a consultant and change agent specialising in developing skills in senior people to increase organizational performance.
Mike is also founder & director of RapidBI, an organizational effectiveness consultancy.

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