An employee’s development should be tailored to an individual’s personal goals, which are determined in a formal performance appraisal. Done well, the performance appraisal process can be extremely positive for both employees and supervisors. Too often performance appraisals are considered to be painful and time consuming, but if they are properly planned and executed they offer an important opportunity to provide employees with constructive feedback that can help them to define successful career paths for their work and careers in both the short- and long-term.

Providing employees with honest feedback and direction promotes efficiency and increases morale in the workplace, and is something an effective leader does on an ongoing basis. The many benefits of performance appraisal include:

• Improved performance and profitability
• The opportunity to open two-way communication
• Increased job satisfaction and motivation
• Better morale and teamwork
• Improved planning for employee development
• Assistance with possible hourly wage or salary increases

Effective employee performance involves many components. Before conducting a formal evaluation, it is a good idea to gather documents and think about the employee and his or her performance. It is also important to keep an open mind and ask the employee to comment on working in the organization, personal successes and challenges, and any general input. Including the employee in the whole process leads to increased commitment and engagement, and often the person will present observations, ideas, and insights that otherwise may not be addressed.

Steps in a performance review

1. Do background work for the performance review

• Clarify job description and responsibilities.
• Clarify employee development interests and needs with the employee.
• List specific development areas for concentration. Holding this conversation with the employee will ensure that the areas of development are those that really interest them and, at the same time, benefit the organization.
• Review performance objectives and performance standards. Again, including the employee will ensure that the objectives and standards are clear.
• Review progress toward objectives through ongoing feedback and periodic discussions.
• Decide on purposes. In all of the following purposes, although it is helpful to present your perspective, it is equally important to ask the employee for insights and ideas for direction. Typically, the purposes include:
  • What the employee is expected to do
  • How well the employee is doing
  • What the employee’s strengths and weaknesses are
  • How the employee can do a better job how he or she can contribute more

2. Prepare the employee

Employees should be told about the appraisal process during their hiring and orientation. When people know it is part of organizational policy, they don’t feel singled out. Schedule the meeting in advance, explain the process, and give the employee a copy of the evaluation form to review and complete prior to the meeting. Ask the employee to also give some thought to his or her performance over the period in question in order to come prepared with examples of successes and challenges, insights into trouble spots within the organization or systems for work, and ideas for improvements and areas for development.

3. Prepare the setting

Plan to conduct the interview in a location that is free from interruptions. Remember to schedule sufficient time; evaluations can take quite a bit of time in some cases.

4. Prepare yourself

Collect necessary information from all sources. This should include a careful review of the detailed job description, previous appraisals, commendations or warnings in the employee’s personnel file, evaluations from peers, subordinates, and customers, if applicable. Complete a draft of the appraisal form in advance. Plan what you are going to say, especially about particularly good or poor performance. Anticipate possible points of confrontation and likely reactions from the employee and maintain an open mind to hear what the employee has to say about points of possible contention.

5. Hold the meeting

In the meeting use the RAP approach: Review the past, Analyze the present, Plan for the future. At least 50 percent of the meeting time should be spent on the future.

• Start on a positive note. Ensure employees know that the purpose of the meeting is to help them perform their jobs better and that their input is valued—that they are to be active participants in the process.
• Describe specific behaviour in simple, direct language. Avoid commenting on intangibles such as attitude, personality, and motivations. Don’t say something such as, “You’re lazy.” Instead say, “I have observed that you frequently spend time chatting with co-workers when there is work to be done.”
• Compare behaviour to specific performance standards whenever possible. Don’t say, “You work too slowly.” Say, “You often take two minutes to chop an onion; it is typically done in one.”
• Encourage employees to participate. Ask how they feel about their own performance in each criterion and if there are other factors or procedures that might be getting in the way of their performance. Ask them to suggest methods and ideas for improvement.
• Try to balance positive and negative feedback. Even if the employee is an extremely low performer in one area, find something positive to maintain self-esteem and optimism for success in the job. For high performers, balance praise with discussion on ideas and areas for further development.
• Discuss reasons for low performance. Telling an employee that improvement is necessary without exploring the reasons for deficient performance will rarely result in improvement. It is very important to explore with employees what is hindering performance and what they can do and what supports or resources they might need to bring performance up to standard. These might include pairing the employee with a high performer, providing additional training, clarifying expectations, brainstorming ways for the employee to meet standards, etc.

6. Measure performance

Develop a performance review form to support your performance discussions. The main components to include are:

• Employee name and title
• Date of review and assessment period
• Annual objectives
• Major job duties and ratings on those duties
• Personal performance criteria and ratings on those criteria
• Strengths and development areas
• Performance action plan for developmental areas
• Career goals and training plan
• Narrative comments from both the manager and the employee
• Employee and manager signatures.

See Appendix 7 for a sample performance evaluation form.