A recent report from i4CP found that approximately 52% of all companies actually conduct annual performance appraisals (APA), with only 55% of employees feeling as though performance appraisals are effective. It is clear that organisations are way off the mark so with this in mind, how can you implement and develop performance appraisals to be an effective process that will continue to motivate and engage your staff?
Simply put, performance appraisals are a process for employees to discuss their performance and development with their manager, as well ask for the support they need in their role. It is used to both assess recent performance and focus on future objectives, opportunities and resources needed.
How do performance appraisals enhance future performance?
We have highlighted 5 key elements to help both employee and manager prepare and complete an effective APA; this ensures an equal balance where both can develop and maximise business efficiency.
1. Align individual and business objectives
By aligning employee goals to those of the organisation, you will be inadvertently embedding what the company is trying to achieve into the employees working life, which is one of the many benefits of performance appraisals for employees and your business. Having the workforce understand their purpose, with everyone sharing responsibility for reaching the same objective, a greater sense of commitment and loyalty to the business is achieved. Employee morale and drive is increased which will in turn improve retention and engagement.
Using goal alignment to communicate role expectations, record progress, and identify employee strengths and limitations enables management to act and make better business decisions rapidly. By ensuring that your employees understand what your organisation is trying to achieve, and how their role and performance relate to the organisation's core mission, you can focus their efforts on the goals with a more transparent approach.
2. Discuss the 7 drivers of employee engagement
When designing effective performance appraisal systems, create a confidential environment whereby employees can openly reflect on how they are feeling at work. For each appraisal, have each employee reflect on the 7 drivers of employee engagement.
- Freedom – Do they have the flexibility to choose and make decisions?
- Clarity – Are there clear goals and a purpose?
- Challenge – Do they have enjoyable and relevant work?
- Growth – Do they have opportunities to develop?
- Recognition – Are they receiving praise and appreciation?
- Togetherness – Is their cooperation, support and trust in the team?
- Voice – Are their ideas and opinions respected?
You can even have them grade each driver on a scale of 1 (never) to 7 (always) so you can track where there is change.
3. Celebrate success
This is how effective performance appraisals can increase employee performance. Take time in the discussion to reflect on the individual’s achievements. This is an empowering way to boost esteem about their work, encourage them to maintain or increase job performance, keep them motivated, and can also highlight a great way they are doing a particular task that can be implemented elsewhere.
Discussing achievements does not necessarily have to be manager-led. As part of the performance appraisal preparation, employees should be thinking about what they’re proud of so that they can show their impact on the business and relate their successes to both their personal goals and the company’s.
4. Understand and support challenges
Appraisals are the ideal forum to open up a conversation about asking for help, development and raising challenges individuals face in their everyday working life. In order to make performance appraisals more effective, invest in the best development and training for the individual, ask open questions about where they need support and if they have any skills barriers they want to address.
While 61% of employees say they would welcome immediate, on-the-spot feedback from bosses and peers about how they’re doing, only 24% say they get it. Meanwhile, 54% of CEOs believe they do. - Achievers
Approaching challenges in a proactive way, whereby employees are taking ownership of their career development with managerial support offers a “two-way street” in which both have equal interest and investment in the others’ success.
5. How to embed 360-degree feedback
360-degree feedback is a peer-analysis approach, which provides your business with an objective framework for identifying performance gaps, developing self-awareness and creating an environment for constructive and honest feedback. It enables people to gather performance feedback from their managers, colleagues, team members and customers and then compare this feedback with their own perception of their performance.
Incorporating this style of feedback can add an extra dimension to an APA as it compares how the individual sees themselves at work, both in behaviours and competencies to how their colleagues do. This will offer further development opportunities, as feedback from others can provide further insight to the individual that neither them nor the manager may be aware of.
You can find out more about how to implement 360 feedback into a performance appraisal to transform your people, teams and culture here