Employee Appraisals and Performance Reviews
This employment guide shows how you can manage and improve your employees’ performance by implementing an appraisal and/or performance management process. This guide is not intended to constitute legal advice.
An employee performance process is a system used by companies to evaluate and measure the job performance of their employees. This process typically includes setting goals and expectations for the employee, regularly reviewing their performance, and providing feedback and training to help them improve. The ultimate goal of the performance process is to ensure that employees are meeting the company expectations and contributing to its overall success.
There is a difference between an employee appraisal and employee performance reviews.
An employee performance process is a broad system that encompasses all aspects of evaluating and managing employee performance. It includes setting goals and expectations, regular reviews and feedback, as well as training and development opportunities. It also includes performance appraisals which also takes into consideration other activities such as tracking progress, providing regular feedback, and identifying areas of improvement or development.
On the other hand, an employee appraisal is a specific part of an employee performance process. It is a formal evaluation of an employee's job performance, typically conducted by a supervisor or manager. The appraisal typically includes a review of the employee's work over a specific period of time, such as a year, and a discussion of their strengths and areas for improvement or development. The appraisal is usually a summary of the whole performance review process, and is often used at the end of the year, which may correspond with pay reviews and bonuses.
In simple terms, the two go hand in hand with an employee appraisal being a specific event within an employee performance process and the employee performance process is the overarching system that encompasses all aspects of evaluating and managing employee performance.
Why should organisations have an employee appraisal and performance review process?
It is well documented that organisations with great workplace cultures are the ones where employees have a real sense of belonging. In these organisations, employees understand what the business is trying to achieve; feel inspired by its mission and values; and importantly, recognise how their role is integral to achieving the overall success of the business.
Put simply, businesses need to provide their employees with a roadmap on how they are going to achieve their objectives and the age old saying of ‘if it is not measured, it doesn’t get done’ couldn’t be truer.
There are many reasons why an organisation may want to measure employees’ performance. Employee appraisals and performance reviews shouldn’t only be used for remedial steps but also as a way of spotting good talent. It is an ideal opportunity to motivate employees by recognising their progress and mapping out their next stage in career development and progression.
Employee appraisals and performance reviews are extremely useful in supporting an organisation’s talent management and retention strategy.
An effective employee appraisal and performance management programme is essential for any successful business. Let’s have a look at some of those reasons:
- Improving performance: By regularly evaluating and providing feedback on employee performance, businesses can identify areas for improvement and help employees increase their productivity, efficiency, and job satisfaction.
- Identifying high-performing employees: Through the performance management process, businesses can identify their top performers and reward them for their contributions. This can also help to motivate other employees to improve their own performance.
- Facilitating career development: By providing regular feedback and training, businesses can help employees identify their strengths and areas for improvement, and develop a plan for achieving their career goals.
- Enhancing communication: The performance management process helps to facilitate open communication between employees and managers, which can improve relationships and create a more positive work environment.
- Meeting compliance requirements: In some cases, certain industries or organisations are required by law to conduct employee performance evaluations.
- Facilitating fair compensation: Performance evaluations can be used to determine promotions, bonuses, and other forms of compensation.
- Improving organisational effectiveness: By regularly evaluating and managing employee performance, businesses can ensure that they have the right people in the right roles, and that their employees are aligned with the company's overall goals and objectives.
Before an employer can evaluate any performance review or appraisal, it is essential that their employees know what they are been evaluated against.
Having a well-established employee performance management process can help the bottom line, as it is an effective was to align individual performance with the organisation’s objectives.
A quick guide on how to implement an effective appraisal and performance review process
Implementing an employee appraisal and performance process doesn’t have to be complicated but typically involves several steps. We have broken these down into a our quick guide on how to implement an effective appraisal and performance review process:
- Define the goals and expectations for the process: This includes identifying the specific outcomes that the company wants to achieve through the process, such as improved productivity or increased employee satisfaction.
- Develop a plan for conducting the appraisals: This includes determining how often appraisals will be conducted, who will conduct them, and what type of evaluation method will be used (e.g. management by objective (MBO); self-evaluation, 360-degree feedback, etc.).
- Establish a system for tracking and measuring performance: This includes setting up tools and processes for collecting data on employee performance, such as performance metrics (key performance indicators (KPIs) and key performance activities (KPAs)), customer feedback, and attendance records.
- Train managers and supervisors on how to conduct effective appraisals: This includes providing guidance on how to provide constructive feedback and training, and how to handle difficult situations or performance issues.
- Communicate the process to employees: This includes providing employees with clear information about the process, how it will be conducted, and what is expected of them.
- Conduct appraisals regularly and provide feedback: This step involves conducting the appraisals and providing feedback to employees on their performance. During this step, employees can also provide feedback on their own performance and manager/supervisor can use the feedback to develop a plan for improvement.
- Monitor and evaluate the process: This includes tracking progress and assessing the effectiveness of the process, and making changes as needed.
It is important to note that this guide is a general outline, and the specifics of the process will vary depending on the company and the goals they have set out. However, this should give businesses a general idea of the steps involved in implementing an effective employee appraisal and performance review process.
Supporting managers to deliver an effective appraisal and performance review process
With the right training, guidance, resources and support, managers can conduct effective employee appraisals and performance reviews that can help improve employee performance, identify and reward high-performing employees, and facilitate career development.
- Training and guidance: Managers should receive training on how to conduct effective appraisals and performance reviews, including how to provide constructive feedback, how to handle difficult situations or performance issues, and how to use the tools and processes that are in place for tracking and measuring performance.
- Clear instructions and expectations: Managers should have clear instructions on what is expected of them in terms of conducting appraisals and performance reviews, and what the goals and objectives of the process are.
- Access to performance data: Managers should have access to data on employee performance, such as KPIs and KPAs (performance metrics), customer feedback, and attendance records, so they can make informed decisions about employee performance.
- Resources for development and training: Managers should have access to resources such as training programs and training opportunities to help employees improve their performance.
- Support from senior leadership: Managers should have support from senior leadership to ensure that they have the resources and autonomy they need to effectively carry out the appraisal and performance review process.
- Time: Managers should have time set aside in their schedule to conduct the appraisals and performance reviews, as well as follow up on the feedback and training provided to the employees.
Getting it right
As a poorly managed appraisal or performance review process can have a negative impact if not managed properly and may create a demoralised and disengaged workforce, here are some tips for getting an employee appraisal and performance review process right:
1. Clearly communicate the process and expectations:
2. Set measurable goals and objectives
3. Use a variety of evaluation methods
4. Provide regular and timely feedback
5. Be objective and fair
6. Listen to employee feedback
7. Follow up and track progress
8. Provide development and training opportunities
9. Celebrate successes
10. Continuously evaluate and improve the process
By following these tips, businesses can ensure that their employee appraisal and performance review process is fair, effective and beneficial for both the company and the employees.
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