Best Practice Tips for Performance Appraisals

Julie Shenkman
Posted by

Come on, come a little closer. It's OK. Really. Yes, we're going to discuss performance appraisals - but don't be scared. We know how difficult it can be, but this time we are going to make it much easier.

Not only do we have an expert, but he's going to share some tips on what major organizations do. So relax.

It's two o'clock on Friday afternoon, and you have one more performance appraisal meeting to attend. You hate these meetings, and your employees seem to hate them as well. They read over your appraisal quickly, wanting only to know whether or not you said good things about them and, if you didn't, what's going to happen now. There must be an easier way. And there is.

"If you plan it out from the beginning, the whole process will go much smoother," says Dick Grote, president of Grote Consulting Corporation in Dallas and author of "The Complete Guide to Performance Appraisal: (AMACOM 1999).

,p>When Grote says "the beginning," he means "before you start the actual appraisal itself. One of the most common mistakes that is made in performance appraisal is that employers forget the most important phase of the entire process: performance planning."

Why Do It At All?

First, you must decide what it really is that you want your performance appraisals to do. Two years ago, Grote was asked by the American Productivity and Quality Center (APQC) to serve as the subject-matter expert for a new benchmarking study that was going to look at best practices in performance appraisal.

He discovered during his research that best-practice companies use their performance management process to:

  • Replace a "best-effort" culture with a results-driven one.
  • Establish and reinforce the importance of core competencies.
  • Target poor performers for termination.

"Targeting poor performers is becoming a common theme," Grote points out. "General Electric's Jack Welch noted in his final stockholders letter that companies have to love and nurture the top 20 percent of their employees, but actively weed out the bottom 10 percent. Organizations are using performance appraisal as a mechanism for doing that."

Divulging Secrets

But planning is more than just deciding how you will use the results. Planning also means making sure the entire process is set up correctly, and here is where Grote divulges his secrets.

"When I was working on the APQC study, I got a real surprise. I would approach companies and offer them the opportunity to be named as a best practice model by APQC, which is a real feather in the cap of an organization. But they consistently turned me down because they see their performance appraisal process as a source of competitive advantage, and they would not reveal what they were doing."

But he did come away with the following tips:

Tip 1: Hold your performance appraisal form in your left hand and your company's mission statement in your right hand and compare them to see if they share the same words and philosophy. That's where so many organizations miss the boat. They have performance appraisals, and they have mission statements, but they don't link the two. The whole purpose of the performance appraisal is to see if employees are achieving the corporate mission. If a company wants to have an immediate impact on the corporate culture, all it must do is tweak the performance appraisal form just a little bit, so that the words in the mission statement also turn up in the appraisal. That makes it much easier to see if the employee is actually supporting the company's direction. It also makes it easier for the employee to understand the connection and perform accordingly.

Tip 2: At the very beginning of the performance appraisal cycle, spend at least an hour with each of your employees to talk about that person's plans for the next 12 months. During that meeting, have a blank copy of the performance appraisal form to refer to, and let the employee take notes on that form about what the two of you are discussing. At the end of the meeting, ask the employee to keep the original and make you a copy of those notes. That form becomes the charter for the employee to operate from for the coming 12 months. It also means that when you have the performance appraisal, you have earned the right to bring up all of those items that you two had originally discussed, and you can more easily show the employee where he did a good job and where he didn't deliver.

Tip 3: A week or so before you have your scheduled performance appraisal with the employee, tell her it is coming up and ask her to make you a list of all the things she has done in the last 12 months that she is really proud of. It doesn't have to be a formal list, and it only has to contain the good stuff. This immediately puts a positive spin on the entire process, and it also protects you from the possibility of managerial embarrassment, in case you forgot any of the employee's accomplishments during the past year.

Tip 4: Don't wait until the employee is in your office at the scheduled time for the performance appraisal to give them your report to review. If you do, they then have to speed read their way through it, while you sit there pretending to be working, while in actuality, you are wondering how the employee is taking it. Instead, give it the employee a few hours before and ask him to look over it and make comments on it. Performance appraisals should be a business discussion, so let the sunshine in on it.

Tip 5: There is a very simple way to determine your final rating for each section of the performance appraisal. Most of these forms want you to respond in a three-tier fashion: The employee either "fails to meet expectations," "fully meets expectations," or "exceeds expectations." Deciding whether an individual is at the high end of "fully meets expectations" or is actually over the line into "exceeds expectations" can be a very tough call for a manager. The easiest way to make that decision is to think about the employee's resume and ask yourself, "What did she do in the last 12 months that was so remarkable that she had to update her résumé?" And if your answer is that she did all the things in her job description well, but didn't need to update her resume to incorporate this past year's activity, then she is someone who is at the high end of "fully meets expectations."

Finally, tell managers that they should not become excessively nervous about legal requirements if they approach performance appraisals in a business-like way. It is possible to tell an employee that she isn't a superstar without having to fear a call from her lawyer.


Become a member to take advantage of more features, like commenting and voting.

Jobs to Watch