Q5.

What are the Understanding Performance

Appraisals?
A5. Performance appraisals are usually designed by human resources
(HR)departments as a way for employees to develop in their careers. They
provide individuals with feedback on their job performance, ensuring that
employees are managing and meeting the goals expected of them and
giving them guidance on how to reach those goals if they fall short.

Because companies have a limited pool of funds from which to award

incentives, such as raises and bonuses, performance appraisals help
determine how to allocate those funds. They provide a way for companies
to determine which employees have contributed the most to the company’s
growth so that companies can reward their top-performing employees
accordingly.

Performance appraisals also help employees and their managers create a

plan for employee development through additional training and increased
responsibilities. They help to identify ways that employees can improve
and move forward in their careers.

Ideally, the performance appraisal is not the only time during the year that
managers and employees communicate about the employee’s
contributions. More frequent conversations help keep everyone on the
same page, develop stronger relationships between employees and
managers, and make annual reviews less stressful.

Q6. What are the Criticisms of Performance

Appraisals?
A6. Performance appraisals are designed to motivate employees to reach
and/or exceed their goals. But they do come with a lot of criticism.

An issue with performance appraisals is that differentiating individual and

organizational performance can be difficult. If the evaluation’s construction
doesn’t reflect the culture of a company or organization, it can be
detrimental. Employees may report general dissatisfaction with their
performance appraisal processes. Other potential issues include:
  Distrust of the appraisal can lead to issues between subordinates
and supervisors or a situation in which employees merely tailor their
input to please their employer.
 Performance appraisals can lead to the adoption of unreasonable
goals that demoralize workers or incentivize them to engage in
unethical practices.
 Some labor experts believe that the use of performance appraisals
has led to lower use of merit- and performance-based-compensation
 Performance appraisals may lead to unfair evaluations in which
employees are judged not by their accomplishments but by their
likability. They can also lead to managers giving underperforming
staff a good evaluation to avoid souring their relationship.
 Unreliable raters can introduce a number of biases that skew
appraisal results toward preferred characteristics or ones that reflect
the rater’s preferences.
 Performance appraisals that work well in one culture or job function
may not be useful in another.

Q7. What Are Performance Appraisals Used for?

A7. Performance appraisals are used to review the job performance of an
employee over some period of time. These reviews are used to highlight
both strengths and weaknesses to improve future performance.

Q8.What Are the Benefits of a Performance Appraisal?

A8. When executed correctly, performance appraisals can pay off
significantly. Among other things, they are capable of boosting employee
morale and engagement, clarifying expectations, helping to get the best
out of staff, and incentivizing hard work and dedication.

It’s not just companies that benefit, either. Open lines of communication
make it easier for employees to raise concerns, express themselves, find
their right path, feel appreciated, and be rewarded when they do a good
job.
Q9. When Should a Performance Appraisal Take
Place?
A9. Performance management is an ongoing process. Throughout the
year, managers are encouraged to engage with employees to establish
goals, note progress, and provide feedback. Formal reviews or appraisals
often take place on a yearly or quarterly basis.

Q10. What is the purpose of a

performance appraisal?
A10. As we’ve already mentioned, the purpose of performance appraisals is to
continuously improve the company’s performance and workplace culture. Let’s take

a closer look at the objectives of performance appraisals. These include:

 Identifying how each employee can improve in their role – Employees

may need additional skills to perform better at their job, which they can gain

through targeted trainning. In other cases, updated equipment or software

might be necessary. A performance appraisal helps determine and document

these needs.

 Identifying strengths and opportunities for improvement within

departments and the company – What are departments lacking? For

example, do they need additional staffing, more equipment, or a larger budget

to perform at an optimal level?

 Determining how to best allocate rewards, promotions, and resources –

Performance appraisals help you figure out which employees are most

deserving of rewards and promotions. What’s more, an analysis of

 performance appraisals tells you which employees and departments would

benefit from which available resources.

 Obtaining documentation on employee performance –

Promotion, disciplinary action, and termination decisions are never easy.

Formalized performance appraisals provide documentation for making

objective and defendable future decisions based on pre-determined criteria.

 Have the tools to set future performance goals – The goals and

benchmarks your company is achieving now are a good indication of what

goals to set in the future and at what pace your business can achieve them.

Q11. Why are performance

appraisals important?
A11. Achieving the objectives of performance appraisals gives companies the
infrastructure to grow and expand. The importance of performance appraisals can be

seen in the impact they have on the organization, which includes:

 Facilitating employee growth and advancement – Performance appraisals

allow employees to identify career advancement opportunities within the

company and the pathways to reach the next level.

 Strengthening employee engagement and retention – Receiving

constructive feedback and seeing opportunities for growth within the

organization helps keep employees engaged. It also motivates them to stay

on board longer.
  Closing skills gaps and boosting organizational performance – By

identifying opportunities for improvement, setting goals, and creating plans for

employee growth, organizations can close skills gaps, prepare for the future,

and gain a competitive advantage.

“It is important that managers understand the connection between high-quality

performance data and regular feedback to both individual and organizational

success,” notes Grace Ewles, Manager of HR Research & Advisory Services

at McLean & Company.

 Improving communication – This is an opportunity to routinely discuss

performance, goals, and expectations, which ensures employees and

managers are on the same page and aligned with the company’s goals.

 Creating accountability – Setting clear expectations for employees in a

formalized setting helps create accountability to meet those expectations.

 Fair and transparent decision-making – A well-structured performance

appraisal process provides a standardized and consistent approach to

evaluating employee performance, which can support fair decision-making

and reduce bias.

Q12. What are the 5 tips for a good

performance appraisal process
A12. Since no two companies are the same, each one will have a different process
for conducting performance appraisals that work best in their specific environment.
However, there are several best practices that every HR department should follow to

set up an effective appraisal process at their organization.

1. Create a clear outline for the performance

appraisal meetings

Understandably, both managers and employees may feel uncomfortable during the

performance appraisal. This is common since the future of the employee depends on

the outcome of the evaluation.

HR can alleviate some of this discomfort by developing a form or outline to use for

performance appraisals. Using a job performance evaluation form or another

appraisal outline will be helpful for both the preparation of the meeting and doing the

performance review itself.

Every type of role will have a slightly different form, tailored to each position’s

specific duties. It is crucial to create a clear and easy-to-use outline that managers

follow to keep things moving smoothly throughout the appraisal. We discuss how to

create a performance appraisal form below.

“Another reason performance appraisals feel so stressful is because they may be explicitly linked
to pay increases and other incentives. In my view, this is a mistake. Psychologically, tying the
appraisal to money can destroy the employee’s intrinsic motivation to perform at a high level. It
may also create feelings of unfairness, as the manager’s vague perceptions are used to justify
granting or denial of an incentive,” notes Joel Trammell, Founder and CEO of Manager360, a
manager development and software company.

“A better approach is to use performance appraisals to discuss the outcomes of the employee’s
goals, offer feedback, and coach them on topics they care about. Separately, the manager can
discuss pay raises and bonuses, which should be tied to fair market rates for the role being
performed.”
HR should also set up the process in a way that helps reduce different types of bias

in performance appraisals and educate managers on these biases.

“Biases like the halo effect should be approached head-on by showing team

members what constructive feedback looks and sounds like. This type of fairness

blocker can also be overcome by involving more team members in the review

process and getting multiple viewpoints on their performance,” says Matthew

Meadows, CEO and co-founder of the performance review software WorkStory.

“Additionally, recency bias can cause issues with regard to fairness and accuracy of

performance appraisal. We would encourage organizations to implement a more

continuous review process to help overcome this issue.”

2. Involve the employees as much as possible

Employees who play an active part in the performance appraisal process appreciate

having the chance to speak for themselves and are, therefore, much more satisfied

with the outcome. Human Resources departments should design a process that

maximizes employee involvement by allowing for the opportunity to answer

questions, explain actions, and provide insight on how they could perform their jobs

better.

Research by Cawly, keeping & Levy, shows that there is a strong correlation

between employee participation and a positive reaction to the performance appraisal

process. The analysis showed that employees who participated were much more

likely to rate the session as fair and useful. They were also more motivated to

improve their performance.

A second study conducted in 2012 by Kim & Holzer reinforced that employees

respond better to performance appraisal outcomes when they are actively involved in

the process.

3. Encourage managers to adapt their

communication style

It is crucial for managers to adapt their communication style to ensure that

employees receive feedback without having their motivation crushed at the same

time. Everyone has different preferences on how to receive negative feedback.

Some prefer managers to be straightforward, while others prefer a subtle approach.

It is crucial for HR to educate managers on the best practices for delivering negative

feedback in various styles to their employees.

Traditionally, the bad news is saved until the last part of a performance appraisal.

This means employees and managers are nervously anticipating the negative part of

the session Daniel Pink (2018) found that employees are most satisfied when bad

news is addressed early on in the interview.

Addressing areas of improvement first means both parties can relax for the

remainder of the session. Implementing this strategy in your process makes for a

more productive session and ensures the evaluation ends on a positive note.

According to the HR consultant Jana Tulloch, HR can also teach managers to give

better feedback through mock-feedback sessions. “In such sessions, managers can

practice giving positive and constructive feedback. The goal is to help managers

provide specific and actionable feedback to their team,” says Tulloch.

Joel Trammell from Manager360, also advises focusing on “feedforward”.

“Performance appraisals are significantly more effective when they focus on what the

employee can do in the future rather than doing a full postmortem on their

shortcomings in the past. If you pick apart a lackluster presentation they gave, for

example, you leave them feeling helpless. What can they do about it now?” says

Trammell.

“Instead, discuss what changes you would like to see going forward. This

“feedforward” approach takes some stress out of hard conversations and shows the

employee a positive path forward.”

4. Ensure more feedback to drive performance

63% of employees want more immediate “in the moment” feedback on their work

performance. They want to know what they are doing right and how they can

improve.

Besides increasing the frequency of performance appraisals from once a year to

twice a year or quarterly, organizations can explore more ways to help managers to

stay more in touch with their teams. Let’s look at a few different ways feedback can

be provided outside of annual performance appraisals:

 1-on-1 conversations – In this approach, managers commit to checking in

with employees at least weekly to provide (and receive) feedback.

 Department meetings – Managers hold weekly or monthly meetings to

discuss the performance of the team and provide constructive feedback.

  Emails – Although less personal, weekly or monthly emails can be sent to the

team as a whole or to individual employees detailing their strengths and areas

of needed improvement.

 Performance appraisal apps – Performance appraisal apps are an excellent

way for managers to easily conduct performance appraisals and provide

feedback to their employees. There are standalone appraisal systems, as well

as platforms that are part of bigger, cloud-based, performance management

solutions.

“The performance appraisal process, as most employees know it, needs to shift from evaluating
past performance to guiding future career opportunities. Preparing managers to become
excellent career coaches is the best way HR can support the performance appraisal process.

If the process is well designed, the performance appraisal should be about helping employees
find the career pathways that best aligned with their personals interests and with what the
company needs.”

5. Meticulously document your employee

performance appraisal sessions

The point of performance appraisals is to gather information that will be used to

make decisions later. These decisions may be made weeks or months down the

road, and it will be difficult to remember every detail of performance appraisal

sessions.

Be sure to implement a process that requires meticulous documentation in a

standardized way so that the information can be easily accessed when needed. As
 we’ve mentioned above, you may choose to use a performance appraisal app or

a talent management system for continuous feedback strategies.

A paper from the NeuroLeadership Institude found that 91% of companies that have

adopted continuous performance management report better data for people

decisions. These companies also report making major progress in removing bias in

promotion and advancement.

Q13. How to create a performance

appraisal form
A13. Designing a thorough job performance evaluation form lays the groundwork
for collecting valuable information. A comprehensive job performance evaluation

form includes several elements.

Name of the employee

Employee ID
Top of the page
Appraisal date
Name of the Manager

Performance Under this section, the manager will rate the employee based on the fulfillment of tasks outlined in the job
ection description. The elements included will depend on the employee’s role in the company.

Under this section, the manager will rate the employee based on their overall behavior. For instance, does
Behavior
the employee have a good attitude about work? Do they get along well with coworkers and management?
ection
This is where managers can recognize employees for going the extra mile.

mprovement
This section deals with how the employee can approve in their current role.
ection
Q14. What are the differences Job performance &
job behavior scales?

A14. When studying individual performance, it is impossible to create a custom-

made assessment for all functions. Instead, researchers looked for one way to

assess them all. This can be helpful in developing your own performance appraisal

form.

Researchers use an instrument that measures two things: in-role and extra-role

behavior.

In-role behavior involves all the activities relevant to the employee’s job description.

Questions include the following statements, and having these questions answered

by a direct supervisor is a quick way of assessing one’s performance.

 Employee achieves the objectives of the job

 Employee meets the criteria for performance

 Employee fulfills all the requirements of the job

The second element is extra-role behavior. Extra-role behaviors are all the behaviors

that go above and beyond the job description. This involves helping out colleagues,

organizing a team event, and more.

 Employee helps other employees with their work when they have been

absent.

 Employee helps others when their workload increases (assists others until

they get over the hurdles)

  Employee volunteers to do things not formally required by the job

Based on the scores on these behaviors, the supervisor can assess the performance

of the employee on both elements.

A final element that’s often added is an item on the potential of the employee. Is the

employee ready for a direct promotion, or do they still have to learn a lot?

Q15. Performance appraisal

examples
A15. Let’s take a look at a few different positive and negative performance
appraisal examples.

Punctuality

 Positive: Employee consistently arrives to work on time, turns in all projects

before or on the deadline, and attends all required meetings promptly.

 Negative: Employee is often late arriving to work and often turns in projects

past the deadline.

Accountability

 Positive: Whether the outcome is good or bad, the employee always steps up

and accepts responsibility for their part in the project.

 Negative: Employee fails to take responsibility for their actions. They tend to

place blame elsewhere.

Communication

 Positive: Employee has excellent communication skills. They always ensure

everyone is on the same page before leaving a conversation.

 Negative: Employee has poor communication skills. Fellow peers and

customers often have trouble understanding the intended message, and

confusion ensues.

A leadership growth coach Joannna Kemper says that when managers are giving

feedback, they need to ensure that feedback is rooted in specific examples and a

continued pattern of behavior. “Lastly, performance appraisals should not contain

surprises – all of it should be an ongoing conversation throughout the year,”

concludes Kemper.