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Steps to an Effective Employee Performance Appraisal Process

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Every experienced HR expert insists that the performance appraisal process or performance review process is critical to the success of your business - while all the other parties involved reject it outright! HR professionals, armed with new research, insist that it can make processes much more efficient, while others argue that it gets in the way of "real work".

A good, streamlined employee performance appraisal process undeniably increases the productivity of your company. With the right performance appraisal strategies, you can combat high employee turnover rates, low commitment, absenteeism and even low returns on investment.

You urgently need to evaluate and change your appraisal process.

If you want to improve (or even overhaul) your performance management system, it will help you get back to the roots - what "performance appraisal" means and how it works.

What is a performance appraisal process?

A performance assessment process is the way you track each employee's skills, strengths, weaknesses and contributions to the workforce. It often determines employee compensation and promotions. For senior managers and HR, a performance review confirms the effectiveness of the hiring process. It is also a way to ensure employee growth and communication between the employee and the employer.

Now that we have established what the performance review is, let's look at the performance management process itself.

Nine steps to an effective performance management process

Performance assessment solutions with a list of predefined templates and functionalities for selective reviews of employee performance management.

Below are nine steps to an effective performance management process:
  • Based on the predefined performance cycle (monthly, quarterly, semi-annual and annual), reviews are initiated for eligible employees
  • Employees and managers meet to select and set SMART goals from the target library
  • During the performance review period, employees and managers meet frequently to discuss progress and make accurate notes
  • Once the performance cycle ends, employees are given a task to complete their self-assessment
  • After the employee's self-assessment, the review task is forwarded to managers, where they are asked to submit their assessment
  • At this point, both the manager and employee meet to discuss and approve the changes or return it to the employee with a request for changes
  • If the appraisal is approved, the manager assigns an overall appraisal to the employee
  • The appraisal assigned by the manager is forwarded to the employee for confirmation
  • Once the appraisal is accepted by the employee, it is submitted to the HR team and the finance team to update the position and benefits

Problems in your current performance assessment process

Most methods of performance assessment, if we are honest, are simply not as good as they need to be.

For this reason, some participants simply go on about it, and the mere term "performance assessment" leaves a bad taste in their mouth. In addition, the poor funding of rewards and appraisals means that there is not much "in it" for the average employee.

This is how Peter Cappelli (ranked fifth in the HR Most Influential 2012 Top 20 International Thinker) puts it:

"Performance appraisals, i.e. the evaluation of an employee's work performance in the previous period by his or her supervisor, are common practice in practically every company. They are one of the most important, time-consuming and unpopular tasks in management".

If you are an HR expert, you probably fear certain performance management system process scenarios.

Here are the five most common criticisms and tips on how to overcome them

"Your process flow for assessing the performance of your employees is ineffective."

The strength of the performance appraisal process depends on many factors. Ineffective performance management is often the result of unclear objectives, undefined processes, tracking wrong performance metrics and failing to provide routine feedback to employees.

There is no surefire formula for ensuring a universal performance management cycle that works in all organisations. The approach must be tailored to the unique, specific needs of the organisation. HR professionals must work closely together to plan an intelligent process with the leadership team.

"A performance assessment process does not lead to employee improvement."
The performance management cycle consists of many important steps. Collecting information and providing timely feedback to employees happens to be only two of the more important steps. However, it is equally important, if not less important, to make actionable suggestions to employees so that they can increase their efforts.

There are several factors that prevent a performance review from failing to provide solutions for improvement. Psychologists report that the way in which negative feedback is given plays a key role. The lack of specific and vague performance feedback is a serious problem.

"Your performance evaluation process is wrong."

This is probably the worst thing you can hear about a performance management process you've worked so hard to develop. HR professionals could do textbook evaluations, but those efforts will still fail if they are not equipped with the right strategy.

The lack of an effective performance management automation system is a major obstacle for HR departments in creating a performance management cycle that is functional, effective, and provides the right solution for improving employee morale.

"Annual performance review system processes suck."

Let's face it - the majority of companies conduct an annual performance review process not because they thought it through, but because they follow the herd mentality of the corporate world.

An annual performance management process is slow and inadequate. It has been shown time and again that employees who receive frequent and continuous feedback are more motivated.

"There is nothing in the performance appraisal process for employees".
Many employees feel that the performance management system process is only a symbolic record and not something that provides value for their growth. Employees hope to be promoted in their jobs and if this does not happen, they will be pulled off the job over time.

To achieve better results, HR professionals must ensure that the performance appraisal process is an integral part of their organisation's value chain. The focus should be on improvement, goal achievement and long-term empowerment of employees.

How to initiate an effective employee performance appraisal process

Here are some actionable tips that HR managers can apply to their performance appraisal system to create an error-free, results-oriented employee appraisal process:
  1. Look for an HR tool that is best suited to your performance management workflow. With the right tool, you can tailor the process to your needs, track process metrics, and work to resolve any weaknesses in the current process.
  2. Likewise, make sure that your employees have a good understanding of their work and know what is expected of them. They shouldn't look surprised when they learn about what is expected of them during their annual performance review process.
  3. Encourage managers to design a realistic performance appraisal process that reflects your corporate culture. Ask them how they can assess employee productivity and what tips they can give their employees to take their work to the next level.
  4. Keep the process simple and track only the metrics that matter. These metrics may vary from department to department. Again, by choosing the right type of automation application, you can create customizable forms that meet department-specific requirements.
  5. Work on structuring and standardization. If the criteria and metrics are not carefully selected to reflect their working environment, employees will doubt the objectivity of performance reviews.
  6. Follow up frequently. A performance review is a good thing, but make sure you contact employees regularly to check that they are taking the advice and achieving the goals they have been set.

Automate the performance appraisal process for employees

Studies show that 48% of companies do not really do anything to measure improved productivity. To address this - and join the smarter 52% - switch to a performance appraisal model that focuses on regular, meaningful interactions that focus on the employee's skills and areas for improvement.

To maintain effectiveness across the organization, take a bean from Jelly Belly's glass and work digitally. When you turn to technology, employee assessment efforts take a step toward true efficiency: modern applications and HR automation tools can help your company make that step.

In an automated performance appraisal process, flexibility is the key. Your HR professionals can keep track of the metrics being monitored and identify which of them are critical. By synchronizing applications, juggling process data, and monitoring the big picture, they can work together to address what really matters - solving problems such as high employee turnover, low commitment, absenteeism, and low return on investment.

Take for example the IceHrm human resource management system. It is designed to keep large, complex and repetitive tasks away from you. And the employee evaluation fits exactly into this bracket. A reliable technical solution like this can take on the role of task master and ensure a thorough, meaningful and effective performance evaluation in all areas!

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