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

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

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

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

Improvement
This section deals with how the employee can approve in their current role.
section

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.