Performance appraisals are supposed to be a chance for two parties – employee and line manager – to have a fruitful discussion and evaluation of the past year, as well as discuss an initial IDP (Individual Development Plan) for the coming year.

However, nowadays I meet many individuals during the course of my consultation activities where they either don’t care about this process or they don’t feel it is as effective as it should be.

Before we deep dive into the performance appraisal (PA) and how we can turn this process into something worthwhile, it’s a must to know that PA is just a part of a bigger process, namely the performance management (PM) system.

PM is an organisation-wide management program that provides a structured approach to:

  • Communicate business strategy
  • Establish a shared understanding of what has to be achieved – and how
  • Facilitate management of self and others
  • Measure and motivate performance (organisational and individual)

In other words, PM is a management process for ensuring employees are focusing their work efforts in ways that contribute to achieving the organisation’s mission. It’s important to know that it consists of three phases:

  1. Setting expectations for employee performance
  2. Maintaining a dialogue between line manager and employee to keep performance on track
  3. Measuring actual performance relative to performance expectations, which is PA

Hence, in order to have a solid, reliable, and most probably accurate PA, we need to highlight the performance rating hurdles that many appraisers fall at. Here are five common errors:

  1. Scoring: when the manager rates too many performance objectives on one part of the rating scale – high, middle, or low – without basing the ratings on concrete data or knowledge.
  2. Recency: focusing only on recent performance within the evaluation period. For example, a manager should not consider only an employee’s performance within the last three months during an annual evaluation. The entire period of employee performance must be evaluated, otherwise the evaluation risks inaccuracy.
  3. Similarity errors: managers sometimes rate employees more favorably if the employees consistently perform job functions in the same style or by using the same process managers do.
  4. Contrast errors: if a manager stereotypes – due to race, religion, or age – when rating, a contrast error results. Each employee’s performance, not his background, characteristics, or lifestyle, should be rated. Also, a contrast error can result when two employees with similar performances are compared. The error occurs when the manager rates one employee lower than the other because the manager likes the other employee better.
  5. Negative approach: when managers begin a performance evaluation with a negative tendency.

On a separate note, having a successful performance appraisal is the responsibility of both employee and line manager, as both should be aware that this process is meant for giving and getting feedback, not criticism, as well as for employment personal development.

This is the right time to review results or accomplishments achieved against objectives, emphasising how these contributed to the work group’s efforts. It’s important to add that the line manager has to discuss causes of problems and reasons for success, emphasising problem solving and concentrating on future actions.

Once managers identify and avoid such errors, the PA is likely to successfully achieve its objectives. Nevertheless, the line manager should be equipped with the following prior to the PA meeting:

  1. Job description and performance objectives
  2. Any feedback or letters from customers/co-workers
  3. Goals set from the current review period
  4. Current disciplinary memos, if any
  5. Work rules and procedures
  6. Documentation notes
  7. The previous performance review

Employee and line manager should agree on action to be taken and discuss ideas for development (the meeting to finalise the development plan may be a separate discussion, but the appraisal form cannot be turned in as finished until the development plan is completed.) Towards the end, the manager needs to summarise the discussion and express confidence in the employee’s ability to succeed.

Finally, if an employee disagrees on the PA process or result, the manager should give the chance to the employee to discuss his/her feelings and listen without arguing or defending their own point of view. As such, the manager must be prepared to adjust his views, if appropriate, and remind the employee that he/she can comment on any remaining areas of disagreement in the employee comment section of the appraisal form.

To conclude, as per my experience with various organisations and appraisal systems, the most effective way is to have a combination of structured face-to-face discussions with diary notes, quarterly then half-yearly reviews with a full review at the end of the year to get the employee back on track as quickly as possible to minimise the likelihood of disagreement at the end-of-year appraisal.