An Employee Performance Appraisal Process Is Critical to Productivity


An effective employee performance appraisal process incorporates several key components, such as a fair and equitable employee review process based on established performance standards that are well-known to the employees.

According to a significant number of employers, one of the most challenging parts of their job includes finding a fair and equitable method for assessing employee performance. A properly structured employee appraisal process performs two key functions:

  • Enabling the employer to identify and reward employees who excel at their job duties, as well as those not performing up to par;
  • Alerting employees to their standing within the company with enough time to make changes if needed.

  • An Effective Employee Performance Appraisal Process Incorporates Several Key Components

    Signs Pointing Everywhere for Leadership

    An effective employee performance appraisal process incorporates several key components, such as a fair and equitable employee review process based on established performance standards that are well-known to the employees. Standards should be written down, shared with employees, and periodically reviewed to see whether they are still appropriate or need adjustments.

    Some companies approach this by laying out a set of standards upfront when an employee is hired and revisiting them annually so that there is no misunderstanding about job expectations. Other companies spend time working out performance standards with the employees to achieve better buy-in and understanding. Either approach can work well, depending on the organization. The important thing is that the employer and employees all know what the standards for satisfactory job performance are so that there are no surprises when evaluations roll around.

    A good employee review process should also be multi-faceted; it should ideally incorporate input from different facets of the organization, including supervisor, customer, and peer reviews. Sometimes, savvy employers also request employees to provide an upfront self-evaluation to determine how accurately an employee is capable of reviewing their own performance.

    While many companies continue to adhere to a supervisor-only type of review, the concept of a " 360-degree" employee evaluation has gained popularity and provides multiple benefits to an organization and its employees. This type of review invites participation from those who interact with the employee in various roles and offers a better snapshot of the employees’ value to the organization. It requires some upfront work on the employer's part since procedures must be made to gather accurate and honest input from customers and staff to feed into the process. But it can be very useful at identifying the impact that employees have on those they work with and serve.

    A good employee performance appraisal process involves a regularly scheduled sit-down review between the supervisor and an employee to assess employee’s performance. These reviews should transpire annually, with more frequent assessment if poor performance is an issue. Specific examples of ways to improve performance can be included in the private evaluation to help the employee distinguish between good and bad performance so that they can get a better idea of what is expected from them.

    Encouraging employee feedback on policies and procedures can be very effective at drawing out any concerns the employee may have that are impacting performance. Where poor performance is an issue, providing specific guidelines for improving performance should be laid out and discussed, along with a timeline for improvement.

    Employee Performance is the Hallmark of any Organization and the Chief Predictor of Success

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    Finding successful ways to evaluate and reward employees is crucial for the smooth functioning of any company. Utilizing the techniques discussed earlier should lead to a robust employee performance appraisal process that promotes dialogue between supervisors and employees alike while ensuring everyone moves in the same direction to accomplish overall organizational goals.

    Lastly, the performance appraisal process must be accurate and honest, which means it must show real-life examples of performance, whether good or bad. Otherwise, the process opens itself up to subjective opinions versus objectivity. When appraisals become subjective, it creates multiple problems, such as legal charges for favoritism and discrimination.

    For example, a subjective performance statement might state that the employee is ‘great at their job’ whereas an objective statement will also include that the employee ‘produced 23% more products than their assigned goal (the assigned goal must be reviewed with the employee at the beginning of the review period) on time with no rejections.

    Turning the same two performance statements around for a poor performing employee might sound like this: ‘the employee is not performing up to standard’ versus ‘the employee missed their assigned goal (which must have been reviewed with the employee at the beginning of the review period) by 54% with 22 of their completed products rejected.’

    Prior to the actual performance appraisal, the employee should be aware of their performance, especially if the performance is below expectations throughout the year. One possible way to accomplish this would be to schedule one-on-one performance meetings with the employee(s).

    These meetings should be documented and can be held either quarterly or semi-annually. While such meetings are a great motivator to continue exceptional performance for good performing employees as they realize the management recognizes their work, it’s an efficient way to put a point across under-performing employees and discuss ways and areas that need improvement.

    If you want to learn more about employee performance improvement plan, I’d highly recommend giving these articles about how to improve employee performance appraisal process techniques and other recruitment blogs a read.

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