Mastering Performance Appraisals: Development and Management Essentials (Full Transcript)

Speaker 1: HR Basics is a series of short courses designed to highlight what you need to know about a particular human resource management topic. In today's HR Basics, we explore performance appraisals, focusing on the development and management of effective performance review tools. Strong performance appraisals are the backbone of effective performance management, so let's start with a couple of definitions. First, performance management refers to the processes that ensures an organization connects mission with the work of employees. Outcomes of effective performance management include clarifying job responsibilities and expectations, enhancing individual and group productivity, developing employee capabilities through effective feedback and coaching, driving behavior to align with an organization's values, goals, and strategies, providing the basis for making human resource decisions, and improving communication between employees and managers. Performance appraisals, also known as performance reviews, guide the process of determining how well employees do their jobs relative to a standard and communicate that information to them. Performance appraisals ensure effective outcomes of performance management are realized. For the purposes of this course, we'll look at the development and management of performance appraisals. By development, we mean the process of creating performance appraisal tools, and by management, we mean the planning, organizing, and leading of performance appraisals. So let's start with development. When developing your performance appraisal tools, align your organizational culture with the tool that you design. When developing a performance evaluation form, do your homework. Find evaluation forms from similar organizations or organizations that share your philosophy of performance management. Use Google or other internet research tools to find organizations or professional associations that provide good examples of what performance tools should look like. Review these results or forms for characteristics that fit your needs. Get inspired through what others are doing and consider how these tactics might be applied in your performance appraisal development. Perhaps most importantly, your performance appraisal tool should be easy to understand and use. Provide clear instructions and examples so managers and employees know exactly what information is required in each section. Make sure your evaluation form follows a logical, sequential order. Document design is critical when creating your evaluation form, and avoid forms that require a lot of jumping around or cross-referencing. While it's up to an organization to decide which elements to include in an appraisal, there are six recommended elements I'd like to explore. First, demographic information. Second, rating methods. Third, job application or job relatedness. Fourth, self-evaluation. Fifth, SMART goals. And finally, six employee development tools. These standard elements will create a user-friendly and useful appraisal tool for your organization. Let's take a look at each. Your performance tool should include demographic information about the employee, people manager, assessment period, and other pertinent information to make the performance management process run smoothly. While a plethora of research and data exists about the usefulness of ranking scales and methods, the following is a simple summary of two popular methods available for your performance appraisals. First, a graphic rating scale, which is a scale that allows a rater to mark an employee's performance on a continuum. I recommend no more than a five-point scale. Second, behaviorally anchored rating scales, which are scales that describe specific examples of job behavior, which are measured against a performance scale. Again, no more than five points. As no single method is best for every situation, a method used in a combination of approaches might be the best solution for you. Next, your performance tools should be job-related, connecting the work an individual does with organizational mission and results. Your performance appraisal tools should be directly connected to an employee's job description. Create different evaluation forms for specific roles. Notably, distinguish non-supervisory and supervisory roles. This might mean separate forms for job groups, classifications, or types. I recommend a flexible form that references the job description of an employee when addressing role-based competencies. Including employee self-evaluation as part of your performance management process gives employees an active role to play. Done properly, employee self-evaluations can provide several key benefits to the organization. Rather than simply being a recipient of feedback from their manager, the employee is given a voice and can inform and shape their performance appraisals and ratings. This active participation helps them be more engaged with both their performance and the review process overall. And a self-assessment allows the manager to view performance through the employee's eyes. Provide space for an employee and people manager to develop and assess performance-related goals. A goal is a statement of desired outcomes towards which effort is directed. I believe that well-defined goals are among the most effective communication tools available to any leader in the performance management process. So consider using SMART criteria to craft your goals. To make your goal SMART, it needs to conform to the following criteria, the SMART criteria. First, a specific goal is clear, unambiguous, and focuses on one topic area. It can be communicated to others without confusion because it's well-defined and easily understood. A measurable goal has a definable endpoint that's quantifiable through numbers or percentages that can easily be measured. An achievable goal is a goal that's possible to accomplish. A relevant goal is one that helps you achieve your desired performance outcome and it's important to you and the organization. Finally, a time-based goal is a goal that has a scheduled completion date. For employees, a performance appraisal can be the primary source of information and feedback from a people manager. By identifying employee strengths, weaknesses, potentials, and training needs through the performance appraisal feedback process, supervisors can inform employees about their progress, discuss areas in which additional training may be beneficial, and outline future development plans. Our second area of focus highlights the importance of managing your performance appraisal process through training, maintaining high standards of feedback, and strong documentation. Most performance systems can be improved by training supervisors in how to do performance appraisals. Since conducting appraisals is important, training should center around minimizing rater errors, providing great feedback, and giving raters details on documenting performance information. Feedback is essential to any strong performance management system. Both positive and constructive feedback should occur as soon as possible. No performance feedback should be left to an annual performance appraisal meeting. I often say there should be no surprises in performance management. It's critical to be specific when providing performance feedback. As a matter of fact, a recent Gallup study shows the impact of different kinds of feedback on employees. The most telling conclusions from the studies include the following. Managers giving little or no feedback to employees result in 4 out of 10 workers being actively disengaged at work. Employees receiving predominantly negative feedback from their manager are over 20 times more likely to be engaged than those receiving little or no feedback. And finally, only 1% of employees who received positive feedback were actively disengaged compared to a whopping 40% of those who didn't receive feedback at all. There's a simple acronym and model to help you give great feedback. The EARN feedback process defines a method for communicating feedback for maximum clarity in development. First, event. Provide your employee with the place and time during which the action or behavior which you're providing feedback was observed. Next action. Describe the specific action or behavior that you're providing feedback on. Result. Explain the impact or consequence of the behavior or action. Finally next steps. Provide a specific request to change or continue the identified action or behavior or ask for ideas on how to move forward. HR professionals recognize that strong documentation is critical in performance management. Their challenge is to teach managers how to document performance issues in appropriate manner. The purpose of documenting performance problems isn't just to protect the employer in the case that a worker files a lawsuit. It's also to show the steps that were taken to help someone be successful at work. Performance documentation must tell a story, rooted in fact, painting a descriptive picture of employee behavior with words. Good documentation creates credibility for the employer by showing that employees are treated in a fair and consistent manner. However, some common mistakes in documentation are made. Here's three. First, making vague, unclear statements about what the employee needs to do to improve. Second, adding personal attacks or subjective comments. And third, providing little or no evidence to support decisions of discipline or performance management intervention. Regardless of the approach used, managers need to understand the intended outcome of performance management systems. When performance management is genuinely used to develop employees as resources, it works. In its simplest form, performance appraisals are observation. Here are your strengths, your weaknesses, and here's a way to develop for the future. Microsoft Mechanics www.microsoft.com.au www.microsoft.com.au