Economics/Business

Performance appraisal definition/objectives/implemention/types

There are several practical ways to increase the performance of a team of collaborators. And to find out what you need to improve on that performance, you need to use the Performance Assessment. In this article we will provide you the definition of performance appraisal.

Waiting for bad results to appear to realize that something is wrong is the worst alternative. The right thing is to do a continuous monitoring through the performance evaluation.

Therefore, in today’s article you will see what Performance Evaluation is, how it works, what are its main objectives and how to implement it correctly.

What is Performance Appraisal?

The Performance Appraisal is an HR tool to analyze the performance of an employee or an entire team. 

Through the Performance Assessment, it is possible to assess technical and behavioral skills of employees . And yet, relate them to the company’s culture.

It is also possible to analyze whether the selection methods are correct and efficient, enabling the correction of processes and avoiding new wrong hiring. 

It is important to note that the evaluation is carried out from time to time, in cycles, to analyze a specific period. Only in this way is it possible to examine the evolution of the employee or team.

What are the objectives of the Performance Appraisal?

The objectives of performance evaluation are diverse, among the main ones are:

1 – Identify the employee’s points of improvement and develop them

Through the mapping of competencies, the Performance Assessment shows the employee’s strengths and areas for improvement. And, with the employee’s information, the manager can put together a more effective Individual Development Plan (PDI) . The training and development process is implemented in the company with the aim of training and retaining talent.

Furthermore, the Performance Appraisal also helps in the promotion of employees.

Here, at impulseup, we use a  PDI Library to speed up some of the collaborators’ development actions. You can take advantage of this content as it is or be inspired to create new Development Plans in your company.

2 – Bring accurate and historical data to the HR team

Every professional evolves gradually. Following this line, Performance Assessments generate historical data about a professional or team and, in this way, it is possible to analyze how their evolution took place.

It is also possible to identify those professionals who have the necessary skills and behaviors to work in the company and, from that, use this professional profile as “ideal”.

3 – Improved communication

The Performance Assessment provides a path for dialogue between the superior and the subordinate, improving the understanding of personal goals and concerns.

In addition, this dialogue can also increase trust and partnership between them, directly influencing the organizational climate

How to implement the Performance Assessment in your company?

The Performance Assessment requires efforts not only from the HR team, but also from managers and directors from other areas. Check out a step-by-step guide on how to implement Performance Assessment in your company.

1 – Define competencies and goals

The first step is to establish the parameters that will be used for the Performance Evaluation. We can talk about two parameters that can be used:

Skills

Competencies are a set of knowledge, skills, attitudes and behaviors that allow the individual to perform their tasks effectively. These competencies can be courses, personal skills or training they have taken, for example.

Therefore, to assess competencies, the process is usually more subjective. For a finance team, for example, the assessed competence might be “punctuality”. In practice, it will be evaluated whether the delivery of billing reports and payments always takes place on time.

Some technical skills must be assessed through knowledge tests. For example, knowledge in some software (eg advanced Excel).

goals

Goals are well known in the corporate environment. They are the results and performances that an employee needs to achieve to deliver value in their work to the organization. Here are some benefits of goal setting:

  • Provides clear guidance to managers and employees;
  • It acts as a kind of guideline for the performance evaluation of teams;
  • Clarifies the company’s expectations in relation to employees;
  • It cultivates a sense of accomplishment among managers and teams, serving as an inspiration to those who have not yet achieved the best performances;
  • Enables increased employee engagement with the company. 

Let’s suppose, for example, that we are talking about a commercial team. The number of sales can be an evaluation parameter. The goal can be 2 sales per day. In a production team, the criterion may be the number of orders assembled. For example, 10 orders per day.

As you can see, a competency can be more subjective, like “productivity”, for example. A goal, by contrast, should always be more measurable.

Therefore, when establishing a performance goal that is clear, realistic and relevant to the employee and relevant to his/her talent, the manager must offer guidance in relation to what is expected of him/her. 

So, after establishing your competencies and goals for the assessment, share them with team members. Everyone should know and understand how you will conduct this process: transparency in the process increases engagement and brings security to the team. 

2 – Set deadlines

You have already defined your competencies and goals. In other words, it means you now have more organized performance expectations. However, these expectations may require some employees to change the way they act and work. However, this doesn’t happen overnight.

Therefore, the next step is to set realistic deadlines so that employees can work towards the expected performance.

Performance appraisal does not have to take place immediately. It can be a process, consisting of observing the team and the progress they will make within that time frame.

Therefore, it is crucial to keep in mind that this progress is more important than the final result achieved when the deadline is over. Your focus should be on constantly improving your team.

3 – Make a 360° assessment

When the deadline that had been stipulated ends, it’s time for the evaluation itself. It’s time for you to analyze the progress of each employee and the team as a whole.

In this case, a recommended methodology is the 360° evaluation. This method is based on bringing together different assessments from stakeholders with different profiles, which will provide different perspectives, to obtain a more complete and accurate picture of performance.

In the 360° evaluation, evaluations are applied:

  • From the superiors;
  • From colleagues;
  • Self-assessments;
  • Customers or partners (when applicable).

It is important that the data obtained in each one be analyzed comparatively, so that the conclusion of this evaluation is more impartial and accurate.

4 – Identify areas for improvement

From the Performance Assessments, you will be able to identify where the points that demand improvement from your employees are. These are exactly the points that need improvement and that you will address through well-targeted development strategies.

For an employee who has technical difficulties, you can indicate a company’s corporate education program, for example. For an employee who has been behaving inappropriately, constructive feedback or coaching may be the best solution to solving the problem.

5 – Use the appropriate phrases

Performance Appraisals are essential for providing employees with useful and transformative feedback

However, not knowing what to say or write can make the process painful and ineffective. That is, the incorrect approach can be worse than not evaluating. 

When evaluating a contributor, use sentences like:

  • Achieve optimal levels of performance and achievement with/to;
  • Provides strong evidence of [specific achievement];
  • Excellent at developing programs/strategies that have generated X results;
  • Improved production by X% through [specific task];
  • Seek new ideas and approaches;
  • Did not meet the attendance targets established in the previous Performance Review;
  • Exceeded original goal of X by X% by [specific task];
  • Can handle more complex projects and assignments;
  • Does not follow the service policy;
  • A negative attitude in some situations tends to cause problems.

Evaluate each situation and use the phrases that best fit. 

6 – Continuous development and feedback

Make no mistake, even after identifying the points for improvement and designing strategies to address them, the evaluation work is not over yet, it is constant.

To start, the recommended thing is to have semi-annual or annual cycles, until the company creates the culture, for then, yes, to have quarterly cycles.

For employees of Generation Y or Millennials, waiting a year to receive a review of your work can be considered too long. Increasingly , feedback processes , informal assessments and performance gamification are being put into practice.

Another key point in this process is the importance of the development and training area. As we said, the main objective is to support the improvement of results for employees and the organization.

What in practice leads to this evolution is having corporate education well aligned with the results of the applied assessments. This is one of the main trends in HR today. 

Types of Performance Evaluation

In this article, we suggest carrying out a 360º assessment as it is the most complete. But there are other types of evaluation . See what they are below:

Self-evaluation

Self-assessment is a great way to promote employee reflection and self-knowledge

In it, the professional evaluates his own performance, according to criteria defined by HR and the manager, identifying his strengths and those that need improvement. 

After the evaluation, the results must be analyzed by the employee together with his/her leader. 

Direct or 90º Rating

Here, the direct manager evaluates each one of his subordinates. In this way, the biggest benefit is that the leader is the person who has the most contact with the activities carried out by the team, thus having a more concrete overview of the performance of each employee. 

Its main characteristic is efficiency, since the manager is the one who best knows the strengths and weaknesses of his team. 

Consensus

This model is similar to the 90º assessment: the difference is that, here, the leader and employee carry out the assessment together, discussing performance together. 

The form is filled in by both, after discussion of each question and grade. 

The Consensus Assessment demands the existence of good communication between leaders and employees. 

180º evaluation

In this type of evaluation, the employee is evaluated only by his/her direct manager. But contrary to what happens in the 90º Assessment, here, the employees also assess the manager. 

So it’s a two-way model! It even tends to improve the internal climate, as the leader also receives feedback

It is an excellent learning tool for the entire team. 

360º evaluation

The 360º Assessment is the most complete model and is usually used by companies and organizations with more experience and maturity with assessments, with a culture of solid feedback culture .

Here, the employee assesses leaders, teammates, and/or potential subordinates. And it is also rated by all of them! 

In this model, everyone evaluates and is evaluated. Therefore, it is considered a complete model. 

Rating by customers

With this model, the employee is evaluated directly by the customers themselves, who can be external or internal. The feedbacks obtained here are very valuable, because without customers, there is no business. 

How to choose the Performance Appraisal model

Before choosing the evaluation model, it is essential that the company stipulates what the objective of the evaluations is. 

Thus, there is not a model that is always the best, but the most appropriate. Therefore, it is necessary to understand the moment of the company, its needs, its reality, its conditions and its objectives. 

If the organization has never conducted an assessment cycle, for example, the 90º Assessment may be the ideal choice. 

But if the company has been carrying out the cycles for a longer time, already has a structured process, it is worth using 360º Assessment. 

It is clear that, as important as knowing the models, is knowing the company itself.

How to analyze the results of a Performance Review

We come to one of the most important parts: what to do with the results obtained in the evaluations? After all, the objective is precisely to obtain and use this data.

The first step is to give feedback to those evaluated, after all, they need to know how they were evaluated. 

For this feedback, a one-on-one meeting is a great way to review the results together with the employee, clarify doubts, analyze each item. 

Take the opportunity to establish an Individual Development Plan (PDI), seeking to improve the strengths and correct the points that need to be improved. 

It is also possible to compare the performance of several collaborators using the Nine Box Matrix . By the way, we have a complete manual on Matrix 9Box! It is completely free and you can purchase your copy here .

It is worth remembering that carrying out constant Performance Assessment cycles allows the company to closely monitor the development of each of its professionals. This monitoring tends to increase team engagement and productivity.

3 Most Common Mistakes in Performance Appraisals

Among the most common mistakes that can impair the effectiveness of Performance Appraisals are: 

Not tracking employee progress

After conducting a Performance Assessment, gaps and points for improvement can be found. 

If the manager does not implement an action plan to correct these problems and/or does not carry out constant cycles of evaluation to check progress, it will be of little use to carry out an evaluation. 

Therefore, monitoring is not a complement, an accessory to assessments. It is part of the development process of a contributor. 

Evaluate all employees in the middle of the rating scale so as not to hurt feelings or overestimate anyone

Here, both the evaluator and the evaluated are harmed. The appraiser, who wastes his time simulating an appraisal. And those evaluated, who do not receive a result consistent with the performance presented. 

Performance Appraisals should not be taken personally. Whoever evaluates should not improve the grade because he likes one employee more than another. Much less should worsen a person’s grade due to personal problems.

Whoever is evaluated should not understand a bad result as an offense, but as an opportunity for improvement. 

To work, the evaluation must be free of biases that influence the perception of performance. Otherwise, those who need to improve do not improve and the good are not valued. 

Focus on the most frequent performance rather than the entire review period

For the assessment to be fair, it is essential that the entire period be analyzed and not just the latest events. 

Imagine that an employee had a great performance during the last 5 months, but had a drop in performance in the last 15 days. It would not be fair and realistic for the assessment to be based only on these two weeks preceding it.

In this sense, it is essential to have some recording tool so that feedback and other employee data are not lost over time.

3 Advantages of a Performance Appraisal System

You already know that performing frequent Performance Appraisal cycles helps in employee development, increasing engagement and productivity

And using a tool facilitates and speeds up the process, in addition to making the results more accurate with the reduction of bias. 

See the advantages of using a platform to do your Performance Management: 

Greater adherence to the process

The fact of making the whole process simpler and more transparent, using a tool reduces objections, increasing the adhesion of the evaluators. 

In fact, increasing adherence is one of the great challenges of HR. Therefore, this factor alone would justify the implementation of a platform. 

Perform any type of assessment

A flexible and online platform allows the realization of any evaluation model (90º, 180º, 360º, etc.) with ease. It is even possible to adapt the type for each team. 

In addition, employees located anywhere can use the system. That is, there is a standardization of the process and unification of the results. 

To help you delve further into the topic, impulseup’s team of experts has prepared an exclusive content on Performance Assessment! To get your free copy, just click here !

Faster and more organized results

Speaking of results, with a Performance Management platform, evaluation results are obtained much faster. After all, data unification is automated. 

In addition, it is possible to issue reports, dashboards and even analyze the data through the Nine Box Matrix.

Now that you have learned what Performance Appraisal is, what are its objectives and how to implement it, how about putting everything into practice? 

You can try it for free and enjoy all the benefits of a complete Performance Management platform without paying anything for it. 

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