Speaker 1: Hi, today's byte is all about performance appraisal, what it is and how to implement it by looking at AIHR's top 5 best practices. Stay tuned. What is a performance appraisal? Performance appraisal is also referred to as the performance review, performance evaluation and employee appraisal. Performance appraisal is a method to regularly evaluate an employee's job performance and overall contribution to the company in an effort to improve that performance. Performance appraisals help to provide feedback. It is a formal moment intended to evaluate job performance. It also helps in making key employee decisions, including giving bonuses, promotions and firing. A crucial element of the employee appraisal is that it is a shared responsibility. On the one hand, it is a shared responsibility between the employee and manager. While the manager has the lead in this process, an active involvement of the employee creates the buy-in that is necessary to make the improvements that the performance appraisal is set up for in the first place. On the other hand, conducting performance management is also a shared responsibility between the manager and HR. The manager does the execution, but HR helps in guiding the performance appraisal process. What are the 5 key success factors of a performance appraisal? Every company conducts their performance appraisals differently. However, there are several best practices that every manager should know. 1. Use a clear outline. Both managers and employees may feel uncomfortable during the performance appraisal. It is arguably the most formal setting they will be in all year and it doesn't happen often enough to make it a common phenomenon. Using a job performance evaluation form or some other appraisal outline will be very helpful for both the preparation of the meeting and for doing the performance review itself. We attach a link to a performance evaluation form below as an example. 2. Involve the employee as much as possible. One of the key challenges in employee appraisals is creating buy-in from the employee. This is backed up by science. A meta-analysis found a strong correlation between the participation of the employee in the performance evaluation and their buy-in. Employee participation is the extent to which employees are able to participate in the performance appraisal session. Employees who participated in their performance review were more satisfied, rated the session as much more fair, useful, and were much more motivated to improve. The meta-analysis we mentioned previously found that a high degree of employee participation explained up to 40% employee satisfaction, 35% of perceived fairness, 30% in perceived usefulness, and 19% in motivation to improve. This shows that it definitely pays off to involve the employee. 3. Start with the bad news. Most of us have learned to start with good news before delivering the bad news and suggestions for improvement. According to Daniel Pink, employees are more satisfied when bad news is addressed early on in the interview. Positive information is then saved until the end, so the meeting will end on a positive note. 4. Employees want more regular feedback. Getting feedback once a year is not something that will drive performance. Employees report they are looking for regular, continuous feedback to do their work better. Find ways to let managers touch base with employees continuously using technology. 5. Carefully document your employee performance appraisal sessions. Important decisions about whom to promote, which salaries to raise, but also who to terminate are based on performance management information. Performance appraisal meetings should, therefore, be meticulously documented. Performance data should be assessed and reported in a standardized way across the organization and stored in a central database. This is also important when you switch to more continuous feedback. This wraps up our byte on the performance appraisal. In this byte, you learned what a performance appraisal is and 5 best practices to implement it in your own organization. If you want to know more about performance appraisal, check out our in-depth written article in the description link. Remember to stay up to date with our learning bytes by subscribing to our channels and if you liked this video, make sure you like and share it and I'll see you soon in our next learning byte.