We are fast approaching the end of another interesting and challenging financial year. The buzzwords in most organizations would soon be “Met Expectations” and “Needs Improvement.” The atmosphere in some workplaces is reminiscent of school days when children return to their seats to collect their report cards or report cards, some elated and others dejected. However, the tension in the air during testing season lingers for a longer period than we experience with report cards on our school days. The whole process can be extremely stressful for all parties involved. A better understanding of the goal, processes, and key elements of a performance review would make the experience worthwhile for everyone and less stressful.

What is performance appraisal?

It is a formal and structured evaluation method to elucidate the performance of an individual or a group / team and the potential for development.

Objectives of performance evaluation:

There could be a plethora of goals to perform a performance appraisal based on the difference in job profile, employee profile, organizational goals, etc. The following are the most common objectives for conducting a Performance Review.

• Employee confirmations: The idea is to evaluate the employee’s performance against the expectations set while the individual joined; and to see if you are ready to be confirmed as a permanent employee.
• Employee Compensation and Promotions – Here, the employee review provides a clear idea of ​​whether the person is ready to take on greater responsibility and link performance to the percentage increase in compensation.
• Training and development need: Performance reviews and performance dialogues identify those areas that need improvement in an individual / group and suggest action plans to address these gaps through training and development.
• Employee Comments and Formal Complaints: The assessment is also used as a platform to understand the factors that contributed to the deviation from expected performance and to understand the support the employee requires to meet future expectations.

The following table provides a simplistic view of the objectives of the Performance Review:

Individual understanding

Performance feedback

Identify areas for improvement

Identify areas of strength

Better understanding of future expectations

Organizational understanding

Salary review

Evaluation of human resources systems

Retention / confirmation / termination / promotions

Identify gaps that make it difficult to achieve business objectives

Documentation

The performance appraisal process

Step 1 – Objective definition of appraisal

Have a clear understanding of what the Performance Review will accomplish.

Step 2 – Set job expectations

Be clear about what is expected both qualitatively and quantitatively from the entrusted work.

Step 3 – Appraisal program design

Create a plan for when, where, and how the appraisal will take place. This includes the tools to be used. 360-degree feedback and 360-degree performance reviews are even used

Step 4 – Evaluate

Information collected on performance is now evaluated against established job expectations.

Step 5 – Performance Dialog

This step involves meaningful conversations that both the appraiser and appraiser have to understand the appraisal and discuss action plans.

Step 6 – Final data for action

In this step, the results of the assessment are documented for future actions.

The key to the success of any performance review is in the quality of the performance dialogue. The performance dialogue determines the future relationship of employees / team with management. This is critical for individuals / teams to be motivated to achieve business goals for the upcoming financial year.

Some current methods of performance evaluation

1. Assessment centers: This is a performance review method that was first developed and used in 1943 in countries like the US and the UK. The goal of this method is to place employees in simulated environments that require employees to display behaviors and patterns that are typical of a work environment to measure employee performance. Trained evaluators observe these displayed behaviors and rate them according to established parameters. The results gleaned from these observations and analyzes help management decide on an employee’s readiness to take on new assignments, increased responsibility, and also areas for improvement that need to be addressed in doing so.
2. 360 degree feedback: It is a method in which all stakeholders such as the manager, peers, client, subordinate, and other department personnel, including staff, provide feedback on an individual’s performance. This technique gives a broader perspective to the individual’s development plan and allows a 360-degree performance evaluation. Some of the areas that can be assessed through this technique are interpersonal skills, customer service skills, meeting schedules, etc.

“It is an immutable law in business that words are words, explanations are explanations, promises are promises but only performance is reality” – Harold s geneen

Every manager would serve his organization well if he understood that the essence of performance appraisals is not about intimidating an employee, but about mutually agreeing on what needs to be done to achieve business goals. This is also something you should focus on in performance appraisal training.