Staff appraisals are one of the most important parts of the employee life cycle. Appraisals are often much-anticipated one-on-one time between the employee and their supervisor, and cover feedback, coaching, and goals.
Appraisals can be executed in several ways and are prone to risk and challenges. Therefore, it’s essential that managers take time to provide a positive, fair and rewarding appraisal experience, remembering that one of the key takeaways of providing any feedback is for the employee to leave the meeting feeling motivated and happy. This article takes you through the purposes of appraisals, the different types of appraisals, common challenges, and how to make the appraisal process more effective.
What is a Staff Appraisal?
Staff appraisals, also called performance reviews, are regular and structured feedback meetings, usually – but not always – held between a manager and their employee. Appraisals are an important part of performance management and are commonly regarded as a process to give employees feedback, but they serve other purposes as well.
A chance to set and review goals
Staff appraisals are a chance to review performance goals. Typically, personal development and business goals are set at the start of the year and worked on until they are reviewed in the appraisal, usually at the start of the following year. Business goals must relate to measurable targets that the employee has an influence in achieving. These goals should stretch the employee and allow them to use their talents and skills. Sometimes, performance ratings and remuneration are based on goal results, so it helps to have clear measurements and staggering levels of achievement to help the employer understand how the employee’s year has gone.
Opportunity for employee feedback
Appraisals are a great opportunity for two-way feedback. Managers can give their employees advice, coaching, and support, but employees should also be comfortable in telling their manager what is and isn’t working. Therefore, managers need to be receptive to this side of the appraisal process, taking on board and acting upon any feedback received.
Identify development needs
Managers can use appraisals to understand any development needs. Staff appraisals might begin with discussing observations on an employee’s performance, but these observations should be aligned to competency frameworks which in turn will clarify which development areas should be focused on for the employee to be rated higher in future appraisals. Managers must also ensure that development plans are put in place for any employee who might need one, based on any constructive feedback received.
Find out what motivates employees
Appraisals, if pitched as a two-way discussion, can be great for finding out things about your employees. Discussing feedback and goals will yield information about motivators. These points can be expanded upon to deep dive into an employee’s development plan and aspirations. This information can be used to not only develop the employee but retain them for longer, too.
Five Appraisal Types
As mentioned above, appraisals are often between a manager and the employee, but there are many ways to conduct staff appraisals. Some of them are rapidly gaining popularity in the world of human resources.
Perhaps the most common form of evaluation, manager evaluations takes place between a manager and the employee. This is a structured, private meeting that takes place as a recognized part of an organization’s performance management cycle. These appraisals are regular, being held once a year or twice annually (sometimes quarterly), including a mid-year performance appraisal. There might be more frequent reviews for employees during their probation period.
Self-evaluations give your employees a chance to critique their own performance. This might be done by passing the employee the performance review document and asking them to fill it in from their own point of view. This can be a standalone exercise or conducted before the appraisal with the manager.
Self-evaluations can be very powerful. It gives the employee a chance for careful reflection on their competencies, considering questions such as “How am I doing?” or “How can I get better?.” Employees can therefore use self-evaluations to take greater ownership of their development and, over the longer term, continuously undertake self-assessment or reflection after completing daily tasks or duties.
Peer evaluations involve a private appraisal conducted by another employee of equal standing to the one being reviewed. These can be face-to-face meetings but are more often completed in writing, to avoid unnecessary conflict or awkward exchanges.
Peer evaluations are useful as they can be more candid and accurate than manager-to-employee feedback. Who better to evaluate job performance than a colleague, who knows the job requirements just as well as the person being reviewed? Lots of information can be gleaned, and this – if imparted in the right way – can be high-value, due to the frequently close-knit nature of working relationships.
360-degree feedback is usually organized as a set number of appraisal questionnaires being sent out to various stakeholders in an organization. This could include peers, subordinates, other managers, C-suite leaders, customers, or suppliers.
As well as giving their managers a clearer picture of employee performance, 360-degree feedback is good for employees as it gives them different perspectives of their skills and performance. For example, an employee might be great with customers, but could be creating friction in their own team. 360-degree feedback needs to be perceived as fair in order for it to be effective. Otherwise, people will not trust it due to fear of results being skewed, for example, by angry customers or jealous colleagues.
Assessment centers for appraisals will have a similar setup to recruitment assessment centers. These events will be slightly longer in duration than a typical staff appraisal and be made up of various activities, tests, and exercises, of which some might be completed individually, others as part of a team of employees who are all being assessed in the same way.
Assessment centers place a high emphasis on evaluating interpersonal skills such as communication and teamwork. They can also be configured to accurately represent working tasks or conditions. For this reason, they can give employers a good idea of their team’s competencies and can also be a break from the norm for employees, as an atypical way of having their performance evaluated.
Drawbacks of Staff Appraisals
Despite there being different ways of conducting them, there are a few common ways the appraisal process can be mismanaged.
Subjectivity and Bias
Staff appraisals can be highly subjective. Outcomes can be influenced by employers, who might judge their employees too leniently or harshly, depending on their perceptions of how the person is doing. Another common bias can be the halo-effect, where the rater ignores a serious shortcoming due to overly focusing on less important positives or favoring similarities in personality or competencies between themselves and the employee.
Employees might also try to influence appraisals by attempting to flatter their supervisors or by ‘gaming’ the process by focusing last-minute on pulling themselves up in a certain area, which might mask longer-term performance issues.
Incentivizing Unethical Practices
Appraisals are often linked to remuneration, for example, performance ratings can relate to merit increases or annual bonuses. Consequently, employees might feel pressured to get results or skew them to obtain a higher rating. This behavior is very common during bonus season and is a common example of fraud in the workplace, which can constitute gross misconduct.
A similar issue, albeit somewhat more of a grey area, is managers altering appraisal scores for various purposes. Managers might go harsher on one employee than another (for reasons known only to themselves) or might be pressured by senior leaders to not increase payroll too much, therefore rating some employees lower than they deserve, to minimize bonus payments or salary increases.
Inconsistency Across Departments
Appraisals are very subjective, and the quality can vary from department to department. Variation doesn’t just come from the capabilities of managers or employees. It can simply arise from different understandings about the value of staff appraisals, the spare time a department has to focus on them, as well as the skill sets in different areas. In this respect, a more operational or ‘hands-on’ department such as engineering, might be less capable of conducting appraisals than the human resources (HR) or finance departments.
Tips for More Effective Appraisals
Understanding the above drawbacks is a good start to creating effective appraisal programs at work. Effective staff appraisals don’t just come together naturally. Leaders and HR professionals must work together to create meaningful processes which are viewed positively by employees.
Structured and scheduled meetings
Like many things in the workplace, an appraisal can be made more effective through preparation. Telling employees (in advance of the meeting) when the appraisal will happen will enable them to prepare themselves, self-evaluate, and generally feel more cared for. Having a plan in place, such as following a set format or allowing time for discussion, will keep the meeting on track, productive, and positive.
Never rush an appraisal – the employee will give better feedback and be more receptive if they feel at ease. Always allow plenty of time in your diary for appraisals, as well as time to overrun in case the employee has questions.
Provide training for managers
Giving any kind of feedback is never a case of common sense. Managers should be trained on how to give effective staff appraisals – this is especially important if they are new, or technically less experienced in leadership duties.
Training should be conducted by HR, or a manager experienced in appraisals. It should cover the appraisal methods used, any applicable forms or documents, how to structure an appraisal, how to give effective feedback and examples, how the appraisal relates to remuneration, risks of bias and unfairness, and how to handle feedback pushback. Role-playing can be included in this training, to allow managers to experience holding an appraisal, as well as tricky scenarios they might encounter.
Involve employees in goal setting
Goal setting is a critical part of the appraisal process as this is where performance can be measured and set against remuneration and other motivating factors for the employee. Because of this, goal setting is also a risky area in terms of ethics, as this is where employees can feel disadvantaged, for example, if they have been given complicated goals or disagree with the way these have been measured. Involving employees in the goal-setting process removes a lot of this risk.
When setting goals, managers should ask employees to come up with their own suggestions and set a separate goal-setting meeting (at the start of the year) when these goals can be negotiated into a version that the employee and employer agree with. This may or may not be a straightforward process. The key is to listen and not rush this process, always seeking a win-win. The best goals are ‘SMART’ – specific, measurable, achievable, realistic, and time-bound. Encourage employees to make SMART goals and fine-tune them into ones that will stretch the employee but still be fair for everyone.
Staff appraisals have a huge impact on the employee, as well as conjuring up negative emotions such as fear or dread. The HR team and leaders must always think of ways to make them more meaningful, such as offering self-evaluation or 360-degree feedback. Nevertheless, it is not enough to simply offer a good process. The appraisal meetings and process must be fair and equitable, especially if it is linked to money and other benefits.
Employees deserve a chance to be heard, and to offer feedback to the organization. Leaders must respect this process by understanding the challenges and risks of setting appraisals. They should work to make the process fair, offering training, involving employees at every step of the process, and most importantly of all, preparing themselves and their teams for these meetings. Only then will appraisals be viewed as a collaborative and motivating process in the eyes of employees.