Number of rejected items from manufacturing line will not exceed .3% per week.Undertaking formal performance appraisals is not usually an activity most managers relish, but it’s an important part of the job of a manager. And it gives you an opportunity, when done correctly, to positively affect the future of your employees. Conducting an effective appraisal means more than just filling out the form your company uses, however. What goes on before you fill out the form is critical to getting the results you’re looking for.
However, if you want to simply fill out the form, skip ahead to Part Two. But if you need some help in thinking about and preparing for the appraisals you have to conduct, continue reading.
As part of the appraisal process in many organizations, the manager and employee have a meeting where the manager explains the appraisal process and the criteria for judging performance. If the process involves goals, the manager and employee discuss and agree on what both of them would like to see achieved over a certain time period (usually a year) and, perhaps, the kind of resources the employee will need to succeed. If you are responsible for defining employee goals, then use the initial meeting to explain these goals (and how you will work together to achieve those goals, if appropriate).
Throughout the year, document significant behaviors that are worthy of discussing during a performance review. Just keep notes as you observe the performance of your employees. It’s simple and easy to do—far easier than waiting until the end of the year and then trying to recollect what happened.
What is a goal? It’s an agreed-upon statement of what an employee will achieve in a specified period of time. A goals statement should also explain the resources necessary to achieve the goals and how you and your employee will measure success.
Each goal should be measurable, attainable, moderately difficult, and accepted by the employee. Here are some examples:
Number of rejected items from manufacturing line will not exceed .3% per week.
Sales per quarter will increase by 5%.
Expense account will not exceed budget.
Sign up 5 new customers per month.
In other words, goals should be measurable and aimed at improving the performance of the employee.
Why do we write goals? Written goals allow you to both measure and recognize achievement. They also let you identify and correct performance problems, and they enable you to identify and focus on your top priorities. Aim to limit the number of long-term goals to no more than five. You can also write additional short-term goals for projects that can be completed in a few weeks or months.
How do you write goals? To write goals, you’ll first need to collect information from your own records and those of your employees. The next section will explain the kind of information you might use.
What kind of information will you need? This question is best answered by you and your employees, because it depends on the specific situation and each job. Some guidelines:
Most goals will relate to productivity that is generally expressed in terms that include
Volume of work
Accuracy of work
Time to produce X
Cost per unit of X
Volume measures the amount of work performed, for example, the number of
orders entered
cartons packed
requisitions written
documents filed
Accuracy measures the degree to which the work is performed free of error, or the quality of the work, for example, the percentage of
orders entered accurately vs. inaccurately
cartons packed correctly vs. incorrectly
requisitions written correctly vs. incorrectly
documents filed accurately vs. inaccurately
Time measures the duration of the work performed, per hour, per day, per week, per month, per year. Examples include
claims processed per hour/day/week
requisitions received and written on the 1st day/2nd day/3rd day
documents received and filed on the 1st day/2nd day/3rd day
Cost measures the dollars spent for work performed, for example,
What if goal achievement is difficult to measure? There may be times when an employee has goals that you cannot easily measure. This does not mean that you should not have such goals. Just be certain to have some criteria for evaluating the level of achievement. Here are some examples:
Monthly reports. “Performance is acceptable when I turn in completed monthly reports no more than two times late in any four-month period, without more than one incident of it being more than one week late in any six-month period, and when it is accepted by my boss in all cases with no more than two revisions that are completed in no more than one week.”
Forecasting.“I will not fail to bring to my boss’s attention adverse trends in my performance before the failure point is reached, no more than two times in any 12-month period.”
Employee development. “Performance is acceptable when training, motivation, and appraisal are discussed during at least two meetings annually between me and each of my direct reports.”
An important part of the appraisal process involves recording incidents and behaviors that are out of the ordinary. These are referred to as “critical incidents” and “significant behaviors. “A critical incident is behavior that is usually extreme (either good or bad) and that should be recorded for legal reasons, for disciplinary measures, or for purposes of recognizing exemplary actions “above and beyond the call of duty.” A significant behavior is one that can make a real difference in an employee’s performance.
There are many reasons you should keep record of employees’ significant behaviors:
It increases the accuracy of the performance appraisal, because it’s based on documentation rather than memory.
It provides evidence to support ratings.
It helps guarantee that you’ll consider the performance during the entire appraisal period.
It reduces bias that occurs when you rate only the most recent behavior.
To be as accurate as possible, write significant behaviors down as soon as possible after you have observed the behavior. Record only the specific behavioral facts of the case. Do not include opinions. Do not rely on hearsay! To ensure that the documentation is a representative record of an individual’s performance, document performance during the entire appraisal period.
In documenting behaviors, be consistent in how you do it. Use the same format and the same level of detail with each individual. Document both productive and unproductive behaviors. Documenting significant behaviors helps to make the performance evaluation interview more productive. You’ll be more confident going into the interview if you have a record of behaviors to back up your ratings because you’ll be more confident you’re rating your employee accurately.
Documenting significant behavior helps improve communication in the interview. There is less likelihood to be disagreement about whether an event occurred or not when you have documented behaviors and incidents. It helps keep the tone of the entire appraisal constructive rather than judgmental. Instead of dealing with impressions, you’re dealing with specific examples of performance. The discussion can focus on how the performance can be improved in the future. Employees are better able to see their deficiencies. They know what they must do in order to improve.
The feedback to employees, both positive and critical, from significant behaviors can enhance employee motivation to improve. When an employee sees that specific behaviors are noted and appreciated, he or she will feel good and work harder to generate such feedback. In the case of behaviors that undermine performance, the employee may not have been aware of the problems. Here are some examples of significant behaviors you might note:
Customer called after hours with urgent need for a replacement part to deal with an emergency situation. Employee personally delivered part, substantially reinforcing the loyalty of an important customer.
Made specific suggestion on manufacturing process that resulted in $50,000 in savings over a six-month period.
Angrily reacted to an incident on the shop floor that intimidated other employees and made it more difficult to investigate what happened.
Accurate documentation of specific behavior and incidents allows an employee to understand which on-the-job behaviors are productive and which are not. Such information gives employees what they need to improve.
If you’ve collected significant behaviors during this appraisal period, then the first step in writing an appraisal that will result in improved or continued good performance is to review these notes. Review also any results or other metrics you have to judge how well the employee has met his or her goals.
Even if your appraisal form only calls for you to “check a box," you generally can add additional comments to justify or explain the rating. In fact, if the appraisal process is to have any value to the employee, you must provide more information than a numeric rating. If you aren’t required to make comments, you may want to consider including them on the appraisal form anyway.
Combined with the significant behavior statements and actual work results, you’re most of the way to completing a form and documenting an effective appraisal.
Another thing you’ll want to do is to review the common errors made during the appraisal process. It’s a wee bit more complicated than you think—the business of providing fair and objective feedback to employees—because ... well, you’re human. You can easily avoid or reduce errors by understanding what errors are common and following the suggestions below for dealing with them.
Contrast Error. The tendency to evaluate a person relative to other individuals, rather than on the requirements of the job. An example would be rating someone low, even though he or she was above average, because everyone else in the department is superior. A review should be based on comparing performance with established criteria.
First-Impression Error. The tendency to make an initial favorable or unfavorable judgment, which judgment serves as the basis for appraising future performance. All subsequent information is ignored or perceptually distorted. By considering behavior throughout the rating period, you’ll reduce this error.
Recency Effect. The tendency to give extra weight to what you have seen recently and diminish the importance of observations you may have made earlier in the review period. In some cases it may be appropriate to weight recent behavior more than old behavior, particularly if it shows improvement. Otherwise, be sure to consider the entire period of appraisal.
Halo Effect. Generalizing from one aspect of performance to all aspects of performance. People have strengths and weaknesses. It is important to evaluate all aspects of performance throughout the period of the review.
Devil Effect. The opposite of the halo effect, generalizing from one or two negative aspects of performance and become blind to the positive aspects of the performance.
Similar-to-Me Effect. The tendency to judge more favorably those people whose background is similar to yours. The more similar the attitudes and background, the greater the tendency to judge that individual favorably. Appraise performance and behaviors, not personality or background.
Central Tendency. Occurs when an employee is consistently rated at or near the midpoint of the scale, regardless of the actual level of performance. This is a problem for several reasons. Such evaluations don’t differentiate between good and bad performers. And they’re particularly damaging to the motivation of high achievers, and they don’t provide a realistic basis for discussing actual performance and improvements during the appraisal discussion.
Negative or Positive Leniency. Occurs when an employee is rated too hard (negative leniency) or too easy (positive leniency). Again, it creates a problem because the appraisal doesn’t reflect true performance. With negative leniency, good performers may get tired of trying to perform well; no matter what they do, they’ll be rated lower. With positive leniency, employees may have unrealistic expectations about raises, promotions, or other career gains.
To reduce rating errors:
Ensure that the criteria being used are job related.
Rate employees in relation to the job responsibilities.
Put other people’s input into proper perspective and don’t weigh it too heavily. If you feel that this additional input warrants any changes in the appraisal, discuss it with your boss.
Consider all performance dimensions and realize that they are not always related. A person can do very well on one dimension and perform poorly on another.
Don’t rate people in any particular order. Do not rate all the best or worst performers first.
Do not compare the ratings of employees until after all employee evaluations are complete.
When an employment situation becomes a legal situation, there’s no substitute for proof—you must have records or other evidence proving that an employee did or did not do something ... whether it’s stealing, lying, or being late too many times.
What may be more important is that you document the communication you have with employees, particularly when it involves discussion of performance problems. Generally, if you have not notified or discussed problems with the employee and documented those discussions, you have less backup if the employee accuses you of discrimination or similar charges. That means ensuring that the employee signs any documents you keep about communication with the employee.
Be on the alert for performance that’s out of the ordinary, either good or bad, and make a note of it. That way, when it comes time to do the appraisal review, you’ll be prepared, and you’ll be similarly prepared for court, should it ever come to that.
The best way to deal with legal issues is to prevent them by conducting a competent, fair appraisal; demonstrating that you’ve invested a lot of time analyzing this employee’s performance. Then conduct the review as we suggest and you’ll substantially minimize the chances that your conduct would lead to a suit or other legal action. Here are some specifics to remember:
Keep copies of HR records even if the HR department also has these records.
Maintain accurate performance data.
Meet regularly with employees to provide the feedback and information they need to perform well, also reducing any surprises and the motivation to sue.
Document, document, document.
How to talk about your employees’ performance. The first thing you can do to conduct an effective performance appraisal is to make sure that there are no surprises in store for the employee. This means that you should have communicated with your employees on a regular basis about how they are doing with their particular assignments and how they are collaborating with others.
The formal appraisal session should be mainly a way to summarize and continue the informal interaction that has previously taken place between you and your employees. It should also be a time to look at how you and the employee can continue to work well together in the future. Your job in this session is not to tell the employee all the things you think he or she did wrong over the past year. One reason performance appraisal sessions are often dreaded is that managers and employees feel the managers have to find something to criticize about the person being appraised. What can happen in that situation is that the manager might mention a negative comment the employee made or the fact that the employee was late to work two times over the past six months or similar trivial points. This causes the employee to feel resentful and become defensive.
Approach the person you’re appraising as a partner rather than a judge. This will minimize hostility. Also, by focusing on your employee’s development rather than on fault-finding, you’ll set a positive tone and the discussion will become more productive and easier for both of you.
You may be conducting a performance review because it’s required, but it’s also a great opportunity to help your employees achieve job goals. Talk with your employees one on one about your expectations for them. Talk about goals, resources to help them achieve these goals, and what you’re planning on doing to help. With some, you’ll set goals to meet certain performance results; with others, you might set target levels for different “ratings"; for others, the goals might be relating to on-the-job behavior; for others still, the goals might target both behaviors and results.
Set goals, work toward them with your employees, and discuss what happened at the next review—easier said than done! Nevertheless, employees want to know where they stand. They want to receive feedback on their performance. Both ongoing discussions and periodic performance appraisals enable you to provide employees with this information.
Tell them the purpose. Since performance helps determine salary, job assignments, transfers, promotions, demotions, and termination, it is important to tell the employee that you’re rating his or her performance based on responsibilities and goals.
The appraisal discussion is also a time to discuss the employee’s job expectations and the organization’s expectation of the employee. You should also encourage the employee to talk about any other job-related issues or concerns.
Minimize reluctance. Many employees are not enthusiastic about performance appraisals because previous ones seemed “a waste of time” or unpleasant. Your skill will determine whether employees regard the discussion with enthusiasm or dread. You can change their attitudes by listening to their concerns and by explaining how you plan to handle the meeting and that the main purpose to help you both improve.
Gain the employee’s commitment. You want the employee to actively participate in the entire appraisal process. This can happen if the employee understands that it will be a two-way discussion of performance. The employee should also understand that the purpose of the appraisal is to recognize success and plan improvement where necessary.
To ensure your appraisal meeting is successful, review the recommendations below and then follow the steps outlined later to help guide you through the meeting.
Discuss actual performance data/significant behaviors.
Compare data with responsibilities/goals.
Rate performance (if appropriate in your appraisal system).
Maintain positive focus.
Focus on solving problems, not finding fault.
Solicit and use input from employees.
Evaluate objectively.
Provide recognition.
Discuss specific actions for you and the employee to take.
Express confidence.
Discuss actual performance data/significant behaviors. If the performance appraisal discussion is to be effective, you should have performance data and significant behaviors for each area of measurement. The employee should have access to this same data before the appraisal session. Both you and the employee must feel that the data is objective and accurate. If the employee reviews the data prior to the appraisal, you can handle any question about its objectivity and accuracy before the appraisal discussion.
Compare data with responsibilities/goals. This way both you and the employee know whether he or she has met, exceeded, or missed the goals for the job. Before the session in some organizations, it is the employee’s responsibility to also prepare data on goal achievement.
Rate performance. Rate the employee’s performance in each area of measurement, based upon actual data. The ratings should take into account any factors outside the employee’s control that contributed to achieving or failing to achieve his or her goals. It’s a good idea to discuss your ratings with your immediate supervisor so that both of you are confident that your ratings are justifiable.
Maintain positive focus. If the employee’s overall performance rating is satisfactory, the emphasis of feedback should be that he or she is doing well. Allow sufficient time to discuss and recognize those areas where performance met or exceeded goals. Exploring the factors that led to success will help you and the employee build on strengths to increase productivity in the future.
Focus on solving problems, not finding fault. In those areas where the employee is not meeting expectations with regard to responsibilities or goals, the emphasis should be on identifying the causes, focusing on solutions, and outlining specific actions that will enable the employee to meet those expectations. The discussion should be future-oriented, focusing on plans for improvement. Expression of concern with past poor performance should be balanced with recognition of achievements, if overall performance is satisfactory.
Solicit and use input from employees. You should actively involve the employee in the performance appraisal discussion. In addition to sharing performance data and participating in the problem-solving discussion, the employee may also have additional items or concerns to discuss. Be prepared to discuss these items openly and work toward solutions. The employee may want to discuss salary, career opportunities, or barriers to satisfactory performance, such as insufficient resources, lack of management support, etc. If you cannot adequately address such issues during the appraisal discussion, you should set a follow-up date to discuss these items at length.
Evaluate objectively. This means that you’re focusing on performance and the factors that led to success or the obstacles that got in the way of success. You are not evaluating the person but his or her performance in a fair and dispassionate way. If the employee knows this is what you are doing and that both of you are there to help each other succeed, the session will be much more productive.
Provide recognition. Praise the employee for those things done well. When you praise, you’re helping the person know what he or she is doing well in order to continue to do those things. It also creates a positive tone for the session.
Discuss specific actions for you and the employee to take. At the conclusion of the session, list specific actions the employee will take to finish old business, take on new goals, and improve his or her skills. Also list the actions you will take to support the employee in these activities.
Express confidence. Let the employee know that you feel good about his or her abilities and that you’re there to help the employee succeed and that you’re confident that, working together, this will happen and that you are glad to be working with him or her.
As you undertake appraisal, here are some ways you can make the actual session go smoothly:
Put the employee at ease at the start of the session. Do this by acknowledging that these sessions can be a little nerve-wracking, but that the purpose is to help everyone in the work group improve and to gather information on how to help these improvement efforts.
Ask the employee what he or she thinks of his or her total performance—not just strong or weak areas. In this way, you get an overall sense of how the employee thinks he or she is doing.
Question the employee about what he or she thinks his or her personal strengths are. This chance to describe what he or she does best helps the employee feel positive about the appraisal.
Tell the employee what you believe his or her strengths are. This demonstrates that you are paying attention to performance.
Describe those areas where you think the employee might improve; use documentation to demonstrate why you are making these observations. Then ask the employee what he or she thinks of this and listen silently to the response. His or her reasons for poor performance or problems on the job might include lack of training, personality conflicts with other employees, misunderstandings about expectations or responsibilities, lack of knowledge about how to use new equipment, and physical obstacles, such as poor lighting or poorly maintained equipment.
Assuming that you can identify the cause of poor performance, ask the employee what you two can do together to take care of it.
Set new goals for performance for the next appraisal period.
Keep a record of the meeting, including a timetable for performance improvement and what each of you will do to ensure that happens.
Be open and honest, yet considerate of the employee’s feelings. The goal is to facilitate improvement for the individual, the team, and the organization.
After the appraisal session, it’s vital to follow up on what you and the employee have agreed on during the session. It indicates that you and the organization are serious about improvement.
Mark your calendar to meet with individual employees to review their progress.
Set up training as needed to address skill deficiencies.
If a personal problem is involved, arrange for the employee to get counseling, if it is available.
If an employee continues to perform poorly, make him or her aware of the consequences (discipline, demotion, or termination).
Provide positive feedback when you see improvements in performance.
Performance reviews are often held as separate meetings from discussions about salary. If it’s this way in your company, then you should explain that to the employee as well as the reasons for doing it this way.
Presumably it’s because the focus of the discussion is performance and not money, which will be considered at another time.
You may, though, be able to tell employees more, such as that their performance was superior and that it will bring them nearer the higher bonuses or that their overall performance was below par, and so that’s approximately what they might expect with their bonus.
If an employee is adamant about discussing salary and it’s against the policy in your company, then you should schedule a meeting to discuss that topic.
When documenting performance or justifying the rating you’ve given an employee, try to focus on behaviors and results. Work on finding a phrase that best describes how you judge the person’s performance in a particular area. Helping you do that is the purpose of this book, but you should, of course, modify these phrases to fit your particular situation. Since there are many related categories in the phrases in Part Three, be sure to check all appropriate categories to find phrases that will work best for you in a particular situation.
For example, take a phrase like “exceedingly competent," delete “exceedingly," and you’re left with “competent.” Substitute “not very," “sometimes," etc. and you’ve got an entirely different meaning—something that may more accurately reflect the shade of meaning you’re looking for.
There are two types of phrases or items in each category. One type describes that characteristic in general terms; the other type includes some more behavioral or results-oriented phrases you might use in the appraisal. For these behavioral items, you should, of course, include your own terms, numbers, etc. and place them under the appropriate rating on the form you’re using.
You might also use these concrete items to establish goals or as the basis for creating a rating scale. For example, you’ll give an employee an “outstanding” or a “5" rating if she makes 1% or fewer errors, an “exceeds expectations” or “4" for 2%–5% errors, and so on.