What is performance? At its most basic, it refers to how well a task is accomplished or executed. In the workplace, employee performance refers to how well workers apply their skills, knowledge, and expertise to get their job done. On a regular, recurring basis, you can score job performance against the responsibilities that come with the worker’s role. This is known as a performance appraisal. This blog explores the different types of appraisals in use in the modern workplace.
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What is Performance Appraisal?
Employee performance is a very important metric for business managers and owners. Promoting employee performance, business productivity, and efficiency increase, ultimately driving productive revenue. However, measuring job performance is not as simple as it may sound.
There are two categories of performance. Task performance focuses on critical thinking and the ability to accomplish tasks. Contextual performance revolves around a worker’s personality and attitude in the workplace. Both involve several variables and metrics that are important during an evaluation or performance appraisal at the end of a job or period.
Exploring the Performance Appraisal Process
What is a performance appraisal? An evaluation of an employee’s task and contextual performance in the workplace. But what does the process include? An employee appraisal usually takes place at least once a year. Certain employers may hold evaluations semi-annually or even more frequently, depending on their company culture. The performance appraisal process involves measuring an employee’s output and personality against several pre-defined metrics.
The exact nature and purpose of these metrics vary from business to business. They serve as milestones against which performance is measured, rewarded, and adjusted. They help keep productivity and efficiency on track while offering workers incentives to keep their performance up to the employer’s expectations. Here are a few common types of performance appraisals used by businesses:
General Appraisal
A general appraisal focuses on setting goals for the year and achieving them. This type of appraisal requires the manager and worker to communicate constantly and effectively to ensure workers know what is expected of them at the end of the year. At the end of the year, the appraisal will evaluate how well the employee performed based on specific goals and milestones achieved during the year.
360-Degree Appraisal
A 360-degree appraisal takes into account what team members and colleagues think of a worker, not just the line manager. This type of appraisal aims to eliminate any risk of managerial bias for or against an employee. Each employee needs to fill out a questionnaire judging the performance of a colleague. At the end of the year, managers take this feedback into account when evaluating performance. 360-degree reviews encourage employees to work on their contextual performance as well, not just performance related to the task.
Technical Appraisal
Many job roles can only be staffed by people who have specialized skills and expertise. As a result of the increasingly technical nature of these roles, conventional HR analytics may not be able to paint an accurate picture of job performance. Technical appraisals assess and evaluate workers based on their technical performance. This will involve significant input from managers or supervisors to judge a technical worker’s skill and ability in executing tasks.
Manager Appraisal
Teams should never be the only ones under scrutiny. Managers, as employees of the company, also require periodic appraisals. These appraisals judge managers on their job performance and attitude. But they also take into account the manager’s relationship with subordinates and clients as well. Most teams give anonymous feedback on their managers to avoid any risk of blowback or friction. However, it is still important to evaluate how well managers handle teams.
Sales Performance Appraisal
Sales teams have very clear milestones against which they are evaluated. One of these is the sales targets they are set for each month and year. These appraisals also take into account a worker’s ability to execute successful sales. It is important that sales targets for any period be realistic.
Otherwise, they can have an adverse effect on employee motivation within the sales team. Salespersons often earn commissions on achieving targets, which motivates them to excel and compete with other top sellers in the team.
Employee Self-Assessment
An employee self-assessment sounds good in theory, but it rarely turns out as well in practice. A self-appraisal requires employees to fill out a performance appraisal form. This form is then compared to an appraisal of the same worker made by a manager. The idea is to identify gaps between employer and employee expectations and to encourage teams to reflect objectively on their performance.
Project Review
Project reviews usually take place at the conclusion of a project undertaken by a team of individuals. Unlike a general appraisal, a project review can take place any number of times during the year. At the end of each project, managers and team members evaluate each worker’s performance. This allows them to constantly improve with each successive project and accomplish more during the year.
Tips for Employers to Execute Better Appraisals
There are several ways that allow employers to make the appraisal process easier and more accurate. It is very important to include details of the appraisal process in the employee handbook. Since it governs every aspect of the employer-employee relationship, workers are required to go through and understand the handbook. That is one way to ensure everyone understands the recruitment process and employer expectations.
There are several techniques employers can use to ensure fair and understandable appraisals that satisfy both parties. For example, a graphic rating scale makes use of a fixed scale that judges employees on the qualities they need to execute tasks correctly. This is a simple method to quantify and rate employee behavior. However, this method usually only highlights the best and worst-performing employees. Average employees don’t register as significantly.
A free-form method is also quite popular. It is in essay form and includes a fact-based description of an employee’s performance. Instances are used to support the facts that are included in the appraisal. It can also include critical incidents ranging from the employee’s best moments to his or her worst. However, care should be taken to keep bias out of highlighting an employee’s ups and downs. Using effective phrases for performance appraisals is crucial for success and accuracy.
The most popular technique by far is the MBO or management by objectives technique. The technique makes use of SMART goals that are set at the start of the year. Progress towards these goals makes up the basis for an appraisal. It is important that the goals should be:
- Specific.
- Measurable.
- Actionable.
- Relevant.
- Time-bound.
Frequently Asked Questions
What are the dimensions of performance appraisal?
A performance appraisal can vary in terms of what it covers. Read about different aspects of appraisals here.
Why do managers fear performance appraisals?
Performance appraisals can often lead to friction between management and employees. Especially if there is a disconnect between both parties’ expectations.
What should be considered the ultimate goal of performance appraisal?
The ultimate goal of a performance appraisal is to align individual performance with the larger company goals. This section explains it in more detail.
How to make performance appraisal be more effective?
From setting SMART goals to fact-supported essay appraisals, there are several ways performance appraisals can be improved for accuracy and effectiveness.
What to say in a performance appraisal?
Performance appraisals should be clear and should set realistic and achievable goals. Managers need to be tactful in their handling of poor performance and should focus on helping their teams improve constructively.
How effective performance appraisals can increase employee performance?
Appraisals offer an incentive for employees to work hard and improve their performance. Coupled with appropriate rewards and remediation, an effective performance review boost employee and team performance.
When should an informal performance appraisal be conducted?
Informal appraisals can be conducted at any time, depending on what the circumstances entail. Usually, these take place when an employee has shown particularly good or bad performance at a point during the year that needs to be addressed.
What should a performance appraisal include?
Performance appraisals should include clear and SMART objectives set at the start of the year. They should also include a self-assessment on the part of the employee as well as from the manager. Ultimately, both management and employee contribute equally to the appraisal.
Is performance appraisal necessary?
Employee appraisals are very important to maintain and improve performance, as well as recognizing and rewarding workers for their effort.
What are the basic goals of performance appraisal?
An appraisal should aim to objectively measure and evaluate employee performance against objectives that align with business goals.
What are the various performance appraisal methods?
There are several types of performance appraisals, including general appraisals, self-assessments, 360 appraisals, and others.
What are the key performance indicators for employee job appraisal?
Key performance indicators can vary from business to business and role to role. It is up to the manager to define appropriate KPIs that allow for better evaluation of performance.
What are the steps in performance appraisal?
There is no one way to create a formal performance appraisal. Some businesses make use of forms, others make use of data collected on the employee, while others still make use of milestones and SMART objectives along the way.
How to develop a performance appraisal system?
Developing a performance appraisal system requires constant improvement to existing appraisal processes. Make use of better indicators that allow for more accurate measurement of employee performance.
