What is a performance appraisal?
Performance appraisals are a regular process designed to review an employee’s ability to complete their job to a set standard. The evaluation is typically completed by a manager or supervisor.
Most companies conduct appraisals on at least an annual basis, although more frequent check-ins throughout the year may be scheduled to consider an employee’s skills, achievements, and progress toward goals. Some aspects of the performance appraisal are objective, like whether set tasks were accomplished, while others, such as work ethic or attitude, are more subjective.
Performance management software tracks this information, as these details are often used to justify pay increases, promotions, or terminations.
Types of performance appraisals
Most companies have one formal performance appraisal in place and sometimes use a combination of other types to make up a complete assessment. These may include:
- Self-assessment. Employees are tasked with reviewing their own performance via a form or questionnaire. They may be asked to reflect on their strengths and weaknesses, specifically highlighting any achievements that a manager can follow up on during a one-on-one meeting with the employee.
- Peer assessment. Employees have to request feedback from their coworkers for peer review scenarios. Colleagues can give valuable insight into what the individual is like when working on shared projects, both in terms of their skills and their attitude.
- 360° feedback. The most comprehensive performance appraisals, 360° assessments, use information gathered from self-assessment, peer contributions, and supervisor feedback. They may also draw on details directly from clients or customers of the employee.
- Negotiated appraisal. These appraisals are more common during disputes or situations in which an employee may be written up or terminated. After the employee has had an opportunity to discuss their own thoughts first, a third-party mediator is brought in to share feedback with the employee.
Basic elements of a performance appraisal
The assessments of performance appraisals are determined by the employee’s role. For instance, customer service information may not be appropriate or necessary for an in-house web developer with zero client-facing time.
In most cases, though, every employee performance appraisal includes:
- Goals and objectives. This is the most important part. The employee’s work is measured against a list of pre-set goals, and supervisors discuss whether or not those goals were met and why. The employee and supervisor then create new goals to develop the previous set or plan for future growth.
- Engagement measurements. Employers want their staff to be interested in the work they’re doing and bring a positive attitude to work each day. This part of a performance appraisal generally looks at the employee’s relationships with their coworkers and the company as a whole, rather than work-oriented goals.
- Growth plans. These comprise an employee’s hopes for themselves in the near future at the company. Establishing individual professional milestones is an important part of ensuring workers are striving to improve themselves and continuing to pursue their development.
Benefits of performance appraisals
While performance appraisals seem like a tedious process at times, they’re a vital part of building a successful team and incentivizing hard work and growth. Performance appraisals also:
- Help human resources and supervisors plan compensation changes. Promotions, bonuses, and salary increases are all necessary parts of keeping a team excited and motivated to continue working for the business instead of looking elsewhere. Performance appraisals review all aspects of each employee’s job, making it clear to decision makers who should be given more responsibility or reward.
- Bring attention to employee weaknesses and skill gaps. Not everyone on the team will be a top performer. Appraisals holistically review which employees need additional support, a performance improvement plan, or extra training.
- Boost employee morale and motivation. Everyone loves to hear that they’ve been doing a good job. During performance appraisals, it’s vital that even negative feedback is framed in a way that motivates the employee to amend behavior to something more positive, while reinforcing what they’re already doing well.
- Determine the company’s future goals. While other aspects of business development set the overarching company objectives for the immediate future, performance appraisals support supervisors when deciding which goals are most realistic given the current team skills and workload.
Best practices for performance appraisals
With a large team, keeping track of performance and feedback throughout the year is challenging. But having a well-established performance management process in place can keep everything organized with standard practices such as:
- Documenting all meetings and feedback discussions. Any conversations about an employee’s performance should be recorded somewhere within the performance management software being used. It’s easy to forget the small details of annual appraisals, so having notes to look back on is vital when making decisions about an employee’s future.
- Checking in with employees between formal performance appraisals. Leaving any conversations about progress toward goals for longer than a few months can be detrimental to the individual employee and the business. Having informal check-ins throughout the year means that goal progress can be assessed while there’s still time to make changes if things are getting off track.
- Creating objective measures to make the process fair. Every supervisor has a different working relationship with employees, which can mean biases feed into their evaluations. While this can’t always be avoided, implementing some objective measurements to quantify performance makes the review system more fair and accurate across the whole team or company.
Celebrate important team milestones, keep track of employee success, and reward everyone for their hard work using employee recognition software.
Holly Landis
Holly Landis is a freelance writer for G2. She also specializes in being a digital marketing consultant, focusing in on-page SEO, copy, and content writing. She works with SMEs and creative businesses that want to be more intentional with their digital strategies and grow organically on channels they own. As a Brit now living in the USA, you'll usually find her drinking copious amounts of tea in her cherished Anne Boleyn mug while watching endless reruns of Parks and Rec.
