How to Improve Performance Appraisals
Source: Partner’s Report
This article deals with using metrics to improve performance appraisals, but we focus on the best part of the article, which addresses how to conduct the appraisal process itself.
Here are some suggestions for improving the value of appraisals while avoiding legal exposure:
- If there has been effective communication throughout the year, the annual appraisal should have few, if any, surprises for the person being appraised.
- Review the prior year’s appraisal before moving on to the current year’s.
- Documentation can be used against an employer. For example, avoid drawing a conclusion about how a specific behavior could damage the firm. Instead, use language indicating that the behavior “could be seen as.”
- Extremes should be avoided. Don’t be too hard or too reluctant to praise.
- Ask staff to do some self-appraisal. Staff members can then be involved in their own career development. Ask them:
- How do you assess your own performance? They will be harder on themselves than you will. But under-performing staff may overrate themselves. For under-performers, follow-up your discussion with a written warning.
- Where do you need help?
- What are your goals? You can then add your input.
- Keep performance and compensation separate. A concurrent compensation discussion distracts the employee.
- Discipline can be part of the performance appraisal.
- Avoid language that can lead to lawsuits:
- Don’t discuss the employee’s health.
- Don’t use the word “attitude.” It isn’t specific. Be specific about any problems the employee has. Tell him or her the problem and how it can be remedied.
- Document how you’ve helped the employee meet his or her performance standards or goals.
- Use a grading system such as “distinguished,” “superior,” “successful,” “needs improvement,” and “unsatisfactory.” Grade the following:
- Productivity—increasing revenue, reducing expenses, saving time.
- Growth.
- Commitment.
- Engagement satisfaction.
- Competitiveness.
Setting up a time schedule for the appraisal process:
- One month prior—communicate to the employee that the system will be collaborative.
- Two weeks prior—distribute the job description and last year’s appraisal. Ask for the self-evaluation.
- One-week prior—review the self-evaluation and have a preliminary informal meeting.
- Day of the meeting—give formal feedback after indicating you’ve considered the employee’s input.
- Three to five days after—have a follow-up meeting to confirm what was discussed, agree on future plans, and to conduct a compensation review.
The appraisal process should be integrated with your strategic planning. Building a bridge between employee performance and your company’s goals is critical to your success. Automated programs that help with this include:
From Partner’s Report—the Monthly Update for CPA Firm Owners, September 2007, p. 1. (“Increasing Margins: Use Metrics to Strengthen Staff Performance Reviews & Development.”) For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30th Floor, New York, NY 10016-5902. One-year subscription $399. 212-244-0360, [email protected].