Performance Management

STAGE 3 — performance appraisal

Why do performance appraisals? At the beginning of the performance cycle, supervisors help their employees write work plans that lay out the results the employee is expected to achieve during the year. Throughout the year, adjustments are made to keep performance on track and plans are updated as priorities change. Now, at the end of the year, it is time to summarize the actual results achieved.

"Doing" a performance appraisal entails collecting information, preparing a formal document and holding a meeting with each employee. The appraisal is a formal summary of the informal performance discussions that have been taking place all year. And it is an opportunity to reflect, identify trends and look ahead to the upcoming year.

Performance appraisal

Collecting Performance Information

Appraisals, for better or worse, require you to draw conclusions about your employees' performance. In an appraisal, you are expected to make generalizations (for example, "You became more effective in your leadership role during the year") and to make summary judgments (for example, giving an employee a "Very Good" rating). However, these generalizations and judgments must be based on substance — data, observations, information, actual things employees did. Therefore, the first step in completing an appraisal is to collect performance information.

Performance information may come from a variety of sources:

On-going tracking of progress
Systems data
Supervisors' observations and notes
Input from other people
Employees themselves

(See Sources of Performance Information for more details.)

As supervisors gather the information they need to prepare an appraisal, a few points should be kept in mind:

Keep it relevant — The information used to prepare the appraisal should be relevant to what was specified in the work plan. Employees should not be evaluated against goals that did not exist during the year and only popped up at appraisal time.
Check for accuracy— Supervisors should check the information they receive from others and from employees themselves. The mantra here is "Trust, but verify." A quality control approach is recommended: Do not check every piece of information, but spot check the data you receive.
Avoid overkill — Appraisals need to be accurate, but neither employees nor supervisors should be spending the majority of their time at the end of the year collecting performance data and preparing appraisals. A sense of balance is required.

Completing the Appraisal

In this part of the process, you complete "the form." This is not fun because it requires setting down in words and numbers an accurate account of what an employee accomplished in relation to what was expected (as defined in the work plan). But it is important because it is a formal and official record that will become a reference for the next three years whenever personnel decisions are being made concerning the employee.

Entering Information

For each expectation defined in the work plan, enter information representing the results actually achieved or the actions observed.

For results expectations, describe what was accomplished. Sometimes you can provide this "description" by simply entering a number. If the goal was to achieve 90% customer satisfaction, all that needs to be entered is the percent satisfaction actually achieved.

For behavioral expectations or values, provide examples of actual behavior. Provide a representative sampling of information concerning the expectation. Avoid lengthy recounting of every note and observation that you may have documented. Avoid platitudes. "You planned effectively and prioritized the important things." This statement conveys very little information. Instead, describe two or three specific things the employee did that demonstrated effective planning.

Try out the exercise, Words on a Performance Appraisal, to see if you can detect statements that would be inappropriate to include in an appraisal.

An approach used effectively by many supervisors is to have employees fill in the appraisal form first. If this is done, it is important to ask employees to provide the information only, not the ratings. After the employee has provided the information, the supervisor can refine the document and enter the ratings. This procedure gives employees a sense of ownership of the appraisal, creates an opportunity for the supervisor to discuss any discrepancies in data or differences in perception before finalizing the appraisal, and ultimately improves appraisal accuracy. It also saves the supervisor considerable time.

Rating Performance

See Tips on Rating Performance for suggestions concerning how to use performance information to arrive at accurate ratings of employee performance.

Minimizing Rating Errors

Appraisals need to be accurate. However, there are a number of natural tendencies that work against accuracy. These tendencies result in "rating errors." Check out What Kind of Bias Is This? for definitions and examples of different forms of rating errors.

To minimize rating errors:

Base the rating on how well the employee performed in comparison to the expectations defined in the work plan, not in comparison to other employees.
Let the data speak. Too often, supervisors begin preparing an appraisal with the preconceived notion that this is a "Very Good" (or whatever) employee. When this happens, supervisors will (subconsciously!) adjust the data to support the preconceived overall rating. Instead, supervisors should let the data drive the rating.
Rate the performance, not the person.
Take into account performance over the entire year.
Rate each expectation independently, based on the information pertaining to each expectation.

Finalizing the Appraisal

Supervisors sometimes find themselves in an awkward position when they complete an appraisal and, without running it by their managers first, go ahead and conduct the appraisal discussion and share the overall rating with the employee. Then, after that meeting, their manager asks them to change the rating to be consistent with standards used by other supervisors in the manager's span of control.

A procedure followed in most organizations to avoid this embarrassment and to ensure a bit of consistency in ratings is to have the next-level manager approve completed performance appraisals before they are discussed with employees. The logic is that the next-level manager has a broader perspective on the appraisals being given than does the supervisor. If there are inconsistencies in ratings, the manager would be able to detect them. However, for this process to work, all the supervisors reporting to a manager would need to route their appraisals to the manager at the same time.

Controlling Rating Inflation

Appraisal involves rating performance and there is a natural tendency for ratings to be inflated. In a small group of, say, three people it's quite possible for everyone to be a stellar performer. But in a group of 500? Or an organization of 5,000, or 10,000? Or a state workforce of nearly 100,000? It's not just improbable, it's impossible. Realistically, most employees are more likely to be closer to average than outstanding.

The consequences of having a performance management system in which nearly everyone is very highly rated are addressed in the Reduce Rating Inflation section, along with suggestions for bringing inflation under control.

Conducting the Appraisal Discussion

If performance is well planned at the beginning of the year, actively managed throughout the year, and accurately captured and summarized in the appraisal document, the appraisal discussion will be an anticlimactic. No surprises. No shocks. No arguments. And there will be an intense desire to get on with the new performance year, building on what has been learned from the year past.

However, things seldom happen exactly as they are described in "the book." Here are some general tips for conducting an appraisal discussion in the real world.

Recognize that evaluation stirs up emotions — Most people believe they are outstanding performers. Others like to put on a game face and make people think they are outstanding performers even though they know in their own minds that they are not. And still others are really hard on themselves and do not believe they are worthy of a good rating. Whatever the case, the appraisal discussion is likely to stir up emotions when these employees are faced with an evaluation of their performance. Be prepared.
Describe performance, not personality — Feedback works best when it addresses what the person does rather than who the person is. When employees perform poorly, discuss their poor performance: how they missed three important deadlines and had to have their work redone several times. Do not discuss them as people: how lazy you think they are or how they must not be very bright if this is the best they can do.
Use examples — Employees long for real feedback, not platitudes. When supervisors provide concrete examples, employees understand clearly what aspect of performance is being discussed.
Stress the contribution — Point out how the employees' accomplishments contribute to the unit's or agency's mission. Employees stay engaged when they can see clearly how their work fits in to the bigger picture.
Address issues — If there is an obvious problem with an employee's performance and the supervisor does not bring it up, the supervisor's credibility is diminished.
Stay on track — Supervisors should plan how they want to conduct the appraisal discussions with their employees — the points they want to emphasize, the actions they want their employees to take following the discussion.
No surprises — The end-of-year discussion is not the time to bring up any surprisingly new issues. Performance should be tracked and supervisors should be providing both positive and negative feedback to employees throughout the year.

It is useful to have a structure for appraisal discussions and to follow the structure in conducting these discussions with your employees. What is the best structure? There is not a single structure that is best for all situations and all supervisors. Check out Formats for a Constructive Appraisal Discussion. The "trick" is to choose the approach that you are most comfortable with and that you believe will be most suitable for the type of work and the individual employees you supervise.

Do you want to improve the quality of the appraisal discussions you conduct? Preparation helps — both on the part of the supervisor and the employee. For supervisory and employee tips on how to plan and conduct an appraisal discussion, see Appraisal Do's and Don'ts.

Sources of Performance Information

Words on a Performance Appraisal

Ratings Review Session

Tips on Rating Performance

What Kind of Bias is This?

Reduce Rating Inflation

Formats for a Constructive Appraisal Discussion

Appraisals Do's and Don'ts