Getting the Most out of the Performance Review Process

Author Mark Johnson Published 8 February 2010

One of the keys to ensuring employees are fully engaged with their work and workplace is to provide regular feedback on their performance; give guidance; recognise their achievements; and to make them feel valued and respected members of their work team.

While working with a client this past week I was reminded of the pain, anxiety and inconvenience facing many managers when completing performance reviews. Simply, most managers don’t like confronting people over less than average performance, or explaining to an employee that they have only just met their performance expectations when they believe they have exceeded their expectations.

Many appraisal systems ultimately have an impact on salary reviews, which raises more challenges in ensuring fairness and equity within and between teams as well as across the organisation . When organisations try to separate performance appraisals from salary reviews, many wonder what the point of performance reviews actually is.

Despite the best attempts by the HR team to develop objective review systems that benefit the employee, manager and the organisation, most people outside the HR team just don’t hold the same passion and faith in the review process.

I suspect the real problem with performance appraisal and review does not lie with the system alone but more importantly with the attitude of managers and employees toward the process and system. Like most things in life, what you get out of a situation is what you put in to it. Negative attitudes toward performance appraisal will result in limited success in the process.

So how can organisations create effective appraisals? On the assumption that the appraisal system and process are of a high standard, fair and equitable, then the answer starts with the culture and communication surrounding appraisal. Consider the following:

• Give appraisal a purpose. Communicate why reviews and appraisals are important and the benefits they hold for the individual and manager.
• Ensure people know how it happens. Don’t make the process a mystery; ensure everyone knows how it works—and allow them to have input into making the review and appraisal discussion more effective. Ask them what they would like to get out of the discussion, how they can contribute to the discussion and how it can be made more effective.
• Ensure people know their role. The appraisal is not for the manager only. The employee, manager and HR all play a part in making it a success so make sure everyone knows their role and how they can make the process worthwhile.
• Give feedback everyday or at least weekly. Review and appraisal is not just an annual or biannual event. People need feedback on their performance every day, every week and every month. It need not be a formal discussion; informal catch-ups prevent any surprises in the formal review. If as a manager you think this is too hard, you might reassess the role of the manager and your suitability to the role.
• Allow people input in setting and achieving their own goals. Too often goals and measures are imposed upon people. I accept that their will be some KRAs which must be imposed, but employees will have far more commitment to goals and measures they set for themselves.
• Ensure stretch goals are possible to achieve. Be careful setting the ever popular “stretch goals”. Your staff won't bother if they're unrealistic. Consider having smaller goals to achieve in a shorter time, which you can build on.
• Focus on behaviours as well as achievements. Appraising behaviour is as important as appraising results. Managers must be clear about the expected behaviours and provide examples of what is required. This must be done at the beginning of the review period.
• Most importantly, managers must be a role model for the support and acceptance of the review and appraisal process. Encourage others by enthusiastically embracing the process and its benefits.

Further Reading:

Stone, RJ, 2008, Human Resource Management, 6th edn, John Wiley & Sons, Melbourne.

McGregor, J, 2009, 'The Midyear Review Takes On More Weight', http://www.businessweek.com/magazine/content/09_27/b4138050190402.htm?chan=careers_managing+your+team+page_top+stories, accessed 1 Feb 2010.

Babbitt, T, 2009, 'Better Thinking: The Case Against Targets, Rewards, Incentives, Performance Appraisals and Ranking Workers', http://www.humanresourcesiq.com/article.cfm?externalID=1321, accessed1 Feb 2010

Krattenmaker T, 2009, 'Appraising Employee Performance in a Downsized Organization', Harvard Business Review http://blogs.hbr.org/hmu/2009/04/appraising-employee-performanc.html?cm_mmc=npv-_-WEEKLY_HOTLIST-_-APR_2009-_-HOTLIST0417, accessed 1 Feb 2010