Performance appraisal
What is performance appraisal in HR?
In HR, performance appraisal is a process where HR teams and managers assess how effectively an employee has carried out their job responsibilities, achieved their goals, and met KPIs (key performance indicators), offering feedback to help them improve.
What is the purpose of performance appraisals?
The purpose of a performance appraisal is to help employees determine their strengths and weaknesses, encouraging them to adjust their performance to achieve overall organizational goals. It also motivates employees to perform better through appreciation and recognition for their hard work. From the organization's perspective, performance appraisals help HR teams identify and address underperformance that may hinder organizational growth.
Who participates in the performance appraisal process?
Here's a quick breakdown of everyone who participates in the appraisal process in an organization:
- The HR team is responsible for running the entire performance appraisal process in a way that aligns with their company culture and policies. They coordinate with managers and employees to make sure that the entire process is completed without any bias. They develop criteria for performance evaluation, create development plans, and make key decisions related to promotions and salary hikes.
- Managers evaluate the overall performance of an employee, provide feedback to employees, receive feedback from them, set clear goals for the upcoming performance period, and suggest relevant training programs.
- Employees reflect on their performance through self-evaluations, receive feedback from their peers and managers, and coordinate with their managers to set goals for themselves.
- Colleagues offer feedback to their peers, who have worked with them.
- Customers also provide feedback on employee performance during evaluations for client-facing roles.
What should be included in a performance appraisal form?
A performance appraisal form should collect essential employee information such as their name, designation, department, and appraisal period. Most performance appraisal forms also include a self-evaluation form that encourages employees to reflect on their performance and rate themselves, taking into account their overall contribution toward their individual, team, and organizational goals.
It should list all the goals that have been set for that particular employee so that managers can evaluate their performance against those set goals. Managers should be able to rate employees on their interpersonal skills, such as communication, teamwork, decision-making, and problem-solving. Additionally, managers should be able to include areas of improvement for their team members and suggest development plans, if required. Finally, the form should allow managers to provide a consolidated performance rating, offer constructive feedback, and include justification for the rating to ensure transparency and clarity.
How often should performance appraisals be conducted?
Organizations should run formal performance reviews once or twice a year and have regular check-ins with their employees once or twice a month to see how they're progressing toward their goals. Some organizations also have quarterly performance reviews to keep feedback and goals updated.
What are the steps involved in the performance appraisal process?
Step 1: Set goals
Encourage managers to set clear expectations for their team members, helping them visualize what success looks like in their role.
Step 2: Collect performance data
Gather the necessary information required to evaluate employee performance through self-assessments, 360-degree feedback, manager feedback, and their progress toward the goals set for them.
Step 3: Evaluate performance
Encourage managers to assess employee performance using the collected data without any biases. Let them identify their weak spots and strengths by comparing the employee's achievements against their expectations and goals.
Step 4: Offer feedback
Let managers set up one-on-one meetings with each of their team members to convey their feedback. The feedback should help them understand what worked, what didn't work, and how they can take their performance to the next level. Encourage managers to receive feedback from their team members, too.
Step 5: Set future goals
Allow managers to set goals and expectations for the upcoming performance period and take up training and development programs, if required.