Hello, welcome back to our blog series with tips for performance management. Last time we looked at performance appraisals and this week we will continue exploring the topic by explaining the guidelines for developing a performance appraisal system.
Developing a performance appraisal system for your organization should be considered just as important as any other necessary business tool. Yet far too many organizations give too little time to preparing a performance appraisal system. Given the effort involved and the time required it can be off-putting, but the benefits to be had far outweigh these inconveniences. These guidelines will hopefully simplify performance appraisals and help you get the ball rolling on creating your own system.
Performance appraisals range in strategy, design, and comprehensiveness, from simple questionnaire forms to detailed evaluations. Finding an appraisal type that will suit the needs of your business will be easy as long as you know what you would like to achieve from doing them.
It is recommended to apply an appraisal system that moves past those simple basic forms so that employees will actually gain valuable direction, motivation, and incentive for performance. On the other hand though, you don’t want an appraisal system that hinders performance and motivation — therefore it is important to find an appraisal system that is in that happy medium for your needs. All effective appraisal systems will include the following points:
Checklist for Performance Appraisals
- Involve employee input.
- Provide statements of standards of performance.
- Provide statements of expectations.
- Include a measure of overall performance.
- Use formal appraisals annually or twice a year, alongside informal appraisals and feedback sessions throughout the year.
- Include specific suggestions for how to improve performance.
- Ensure that the dimensions measured are areas of performance that the employee can control.
- Evaluate their processes as well as outcomes.
How Many Aspects of Behavior Should You Include?
When creating the performance appraisal, the number of aspects of behavior will directly influence the effectiveness of the appraisal. Research suggests that including more, as opposed to less, job dimensions within the performance appraisal measure can increase the accuracy of the overall measure. For example, performance appraisals that only include one to three dimensions of performance can result in much less accurate scoring than those that include between ten to fourteen dimensions.
Experts often lament that performance appraisals do not include enough questions. One survey showed that after surveying over eight hundred professionals from a variety of companies, at least 70 percent felt that their last appraisal was not worthwhile. The challenge is to include enough powerful questions that relate to the dimensions of performance for the appraisal to be effective.
Dimensions of Performance
The two most widely used are either a “balanced scorecard” or the “360 degree feedback” systems. Both performance appraisals are a popular choice for many organizations — choosing one or the other really depends on what you want to take away from the appraisal. The following areas of performance dimensions are suited to be used in both appraisal systems. Here are some sample questions to give you an idea of what to ask:
Leadership
- Has the employee shown leadership qualities in their role?
- If yes, can you provide examples and specifics of their positive leadership contributions?
- If not, how can the employee improve on this aspect?
Interpersonal Skills
- What interpersonal skills has the employee shown while working with coworkers?
- Have you ever had any difficulties with the employee on an interpersonal basis?
- What could you recommend to the employee to improve their interpersonal skills?
Problem Solving
- Can the employee solve problems efficiently?
- What skills has the employee shown in problem solving and reaching solutions?
Motivation
- Do you think the employee is motivated by their role and responsibilities?
- How have they demonstrated their motivation?
Efficiency
- Does the employee show effectiveness and efficiency with their work methods?
- Could the employee improve upon their efficiency in some aspects of their role?
And here are some other points you want to cover in your appraisals:
- Find out how they are doing in their role and with the organization.
- Find out if they know what is expected from them.
- Are they taking responsibility for their performance?
- Find out their strengths and weaknesses.
- Do their goals support the organization’s goals?
- Do they feel like a valued part of the team and organization?
Rater Training Can Improve Accuracy of Performance Appraisal
Getting the rating system right can be tricky, especially for first-timers who haven’t had any training. Ratings are typically more accurate when raters have been properly trained. Here are some guidelines for training raters:
- Define each aspect of job performance (for example, what does it mean to have high quality?).
- Give raters concrete examples of poor, average, and high performance.
- Encourage managers to keep a log or diary on employee performance throughout the year, to then serve as a basis for the annual appraisals.
- Encourage managers to give feedback continuously throughout the year.
- Inform managers regarding issues associated with stereotyping on the basis of race/ethnicity, gender, etc.
Assessing the System
Assess the performance appraisal system by asking questions such as:
- Does it provide information needed to establish plans for training employees?
- Are the behaviors targeted in the appraisal observable?
- Do users think the appraisal system is fair?
Join us next time for more tips for performance management as we look at the five major processes of performance management.
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