Best Practices: Performance Appraisal

A New Paradigm

Performance appraisal has finally caught up with 21 st -century management practices. In the old model, performance appraisal tended to be one-way, adversarial, oriented toward the past and universally despised by all. In the new model, performance appraisal:

• Involves an ongoing process of planning, goal-setting, feedback and performance review
  
  
• Is an ongoing series of discussions between supervisor and employee rather than an annual event
  
  
• Focuses on the future more than the past
  
  
• Focuses on improving employee performance and career development rather than employees' mistakes
  
  
• Is used as a tool to build trust, open communication and better supervisor/employee relationships at all levels of the organization

Performance Appraisal Best Practices

Companies with world-class performance appraisal systems generally engage in the following practices:

• Make performance appraisal part of the culture.
  
  
• Walk the talk. (The CEO must model the right performance appraisal behavior with his or her direct reports.)
  
  
• Link performance appraisal to organizational objectives.
  
  
• Invest in training and education.
  
  
• Design the system for the unique needs of the organization.
  
  
• Use performance appraisal to build relationships between supervisors and employees.
  
  
• Use flexible, customized appraisal forms.
  
  
• Separate the compensation conversation from performance review.

Implementing a Performance Management System

Implementing an effective performance management system requires four basic steps:

1. The planning session. Supervisor and employee mutually agree on the job responsibilities and goals and the measurement criteria.
   
   
2. Regular performance reviews. Supervisor and employee meet every one to two months to track progress against the goals.
   
   
3. Ongoing coaching for improvement. Supervisor and employee identify areas for improvement and supervisor provides additional coaching and resources.
   
   
4. A formal, year-end performance review. Supervisor and employee agree on performance versus expectations and plan for the next year.

Preparing for the Performance Review Session

Experts recommend a five-step process:

1. Review the objectives of the session. The primary objectives are to review performance over the previous period, discuss any "leftover" issues and plan the future.
   
   
2. Dual preparation. Both supervisor and employee should prepare a rough draft evaluation as well as lists of any questions or issues to be discussed.
   
   
3. Plan your approach. Identify what you want to learn from and convey to the employee. Create a list of open-ended questions to keep the employee talking during the session.
   
   
4. Check your attitude. Are you doing the review because you feel obligated or because you view it as part of the performance management process?
   
   
5. Select the right time and place. Plan at least one hour of uninterrupted time -- preferably outside your office, with no distractions or interruptions.

Creating a Customized Appraisal Form

Avoid standardized performance appraisal forms. Instead, create your own customized form that:

• Fits the unique needs of your organization and your performance appraisal system
  
  
• Properly documents job-based understandings that develop between supervisor and employee
  
  
• Provides easy-to-reference information to properly guide the future development of the employee
  
  
• Is highly flexible
  
  
• Focuses more on the future than the past.

Contributing Experts:

Bill Scherer

Bill Scherer is a nationally recognized expert on the subject of performance appraisals and performance management. Since forming Scherer & Associates Inc. in 1977, he has served the human resource development and performance effectiveness needs of more than 500 private-sector and government organizations. A prolific author, Scherer has published more than 350 articles on management effectiveness and is a widely traveled speaker for all types of business and professional groups. In addition, he serves as a technical advisor to several management development organizations and serves in an advisory role on the boards of several major corporations. A popular and highly rated TEC speaker, Scherer regularly addresses TEC groups on the subjects of performance appraisal and productivity improvement. For the past eight years, he also has been a TEC Chair, facilitating two TEC groups in Orange County, Calif.

Judith Segal, Ph.D.

As founder and president of the J. Segal Co., Judith Segal consults, gives seminars and organizes training programs in human relations, management training and communication throughout the United States and Canada. She specializes in team building, conflict resolution, communication and facilitating organizational change. She also is much in demand as a behind-the-scenes coach, working with CEOs, corporate presidents, managers and supervisors to fine-tune their management skills. Dr. Segal has spoken to more than 150 TEC groups on the subjects of performance appraisal, leadership, delegation and confronting problem behavior. She also sits on the TEC Speaker Advisory Board, helping plan and implement strategies to improve the speaker portion of the TEC model for members and speakers alike.

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