9 Steps to Effective Employee Performance Appraisal Process

Every seasoned HR expert insists that the performance appraisal process, or performance review process, is crucial to your organization’s success–while everyone else involved dismiss it altogether! HR pros, armed with new research, insist that it can make processes much more efficient, while the others argue that it gets in the way of ‘real work’.

A good, streamlined employee appraisal process undeniably boosts your company’s productivity. With the right performance appraisal strategies, you can combat high employee turnover rates, low engagement, absenteeism, and even low ROIs.

You desperately need to evaluate and change your employee performance appraisal process.

If you’re looking to improve (or even overhaul) your performance management system, it helps to get back to the roots–what ‘performance appraisal’ means, and how it works.

What is a performance appraisal process?

A performance appraisal process is how you keep track of each employee’s abilities, strengths, shortcomings, and contributions to the workforce. It often determines worker compensations and promotions. For upper management and HR execs, a performance review validates the effectiveness of the hiring process. It is also a way of ensuring employee growth and communication between the employee and the employer.

Now that we’ve established what the performance evaluation is, let’s delve into the performance management process itself.

Nine steps to an effective performance management process

Performance review solutions with a list of pre-defined templates and functionalities for point-in-time reviews of employee performance management.

Listed below are nine steps to an effective performance management process:

1. As per the pre-defined performance cycle (monthly, quarterly, half yearly, and annual), reviews are launched for eligible employees.
2. Employees and managers meet to select and set SMART goals from the goal library.
3. During the performance review period, employees and managers often meet to discuss progress and take accurate notes.
4. Once the performance cycle ends, employees receive a task to complete their self-evaluation.
5. After employee self-evaluation, the review task is forwarded to managers where they are prompted to submit their evaluation.
6. At this point, both the manager and employee meet to discuss and approve or send back to employee requesting changes.
7. If the review is approved, the manager awards an overall rating to the employee.
8. The rating awarded by the manager is forwarded to the employee for acknowledgement.
9. Once the rating is accepted by the employee, it is submitted to the HR team and finance team for position and benefits update.

Problems in your current performance appraisal process

Most performance appraisal methods, if we’re being honest, simply aren’t as good as they need to be.

This is why some participants simply go through the motions, and the mere term ‘performance evaluation’ leaves a bad taste in their mouth. Further, poor funding for rewards and appraisals mean that there’s not much ‘in it’ for the average employee.

Here’s how Peter Cappelli (Ranked fifth on HR Most Influential 2012 Top 20 International Thinker) puts it:

“Performance appraisals, the evaluation of an employee’s job performance over the previous period by one’s supervisor, are a standard practice in virtually every organization. They are one of the most important, time-consuming, and unpopular tasks in management.”

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

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

1. “Your employee performance appraisal process cycle is ineffective.”

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

There is no sure shot formula to ensure a universal performance management cycle that works across all organizations. The approach has to be tailored to the organization’s unique, specific needs. HR professionals have to work closely to plan an intelligent process with the managerial team.

2. “A performance appraisal process doesn’t lead to employee improvement.”

The performance management cycle consists of many important steps. Gathering information and giving workers timely feedback happen to be just two of the more important steps. But giving actionable suggestions to employees to notch up their effort is of equal, if not less, importance.

There are several factors that stop a performance assessment from not delivering improvement solutions. Psychologists report that the manner in which negative feedback is delivered plays a key role. The lack of specific and vague performance feedback is a serious concern.

3. “Your performance appraisal process is wrong.”

That’s probably the worst thing to hear about a performance management process you’ve worked so hard to design. HR professionals could be doing textbook assessments, but these efforts will still fail if they’re not equipped with the right strategy.

The lack of an effective performance management automation system is a huge roadblock for HR departments to create a performance management cycle that is functional, effective, and the right solution geared towards enhancing the employee morale.

4. “Annual performance appraisal system processes suck.”

Let’s face it–the majority of companies run an annual performance management process not because they have thought through it, but because they are following the herd mentality of the corporate world.

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

5. “There’s nothing in the performance appraisal process for employees.”

Many employees feel that the performance management software process is just a token protocol instead of something that offers value to their growth. Employees hope for promotion in their jobs, and if it doesn’t happen, they become disengaged from work over time.

To get better results, HR professionals have to make sure that the performance appraisal process is an integral part of their organization’s value chain. The focus should be on improvement, accomplishing goals, and empowering employees in the long run.

How to initiate an effective employee performance appraisal process

Here are a few actionable tips that HR professionals can apply to their performance appraisal system to create a flawless, result-driven employee evaluation process:

1. Look for an HR tool that works best for your performance management workflow. The right tool will allow you to customize the process as per your needs, track process metrics, and work on resolving the weaknesses that are present in the current process.
2. Similarly, make sure that your employees have a good clarity about their job and what is expected of them. They shouldn’t look surprised to hear about the job expectation from them during their annual performance review process.
3. Get managers involved to design a realistic performance evaluation process that reflects your company culture. Ask their inputs on how to assess employee productivity and what tips to offer their employees to take their work to the next level.
4. Keep the process simple and track only the metrics that matter. These metrics could differ from one department to another. Again, choosing the right kind of automation app allows you to create customizable forms to fit department-wise requirements.
5. Work on structuring and standardization. If the criteria and the metrics aren’t chosen carefully that mirrors their work environment, employees will doubt the objectivity of performance reviews.
6. Follow-up frequently. A performance review is a good thing, but make sure that you regularly touch base with employees to check if they are internalizing the advice and meeting the goals that was set for them.

Automating employee performance appraisal process efforts

Studies indicate that 48% of companies don’t really do anything to measure improved productivity. To address this—and join the smarter 52%—switch to a performance appraisal model that puts an emphasis on regular, meaningful interactions that focus on the employee’s prowess, and areas to improve.

To keep things effective across the organisation, take a bean out of Jelly Belly’s jar, and go digital. Employee evaluation efforts take a step towards true efficiency when you turn to technology: modern apps and HR automation tools can help your company take this step.

With an automated performance appraisal process, flexibility is the name of the game. Your HR professionals can keep track of the metrics that are watched, and figure out which ones are key. By syncing apps, juggling process data, and keeping an eye on the larger scheme of things, they can work together on what truly matters—addressing issues like high employee turnover rates, low engagement, absenteeism, and a low overall ROI.

Take Kissflow HR Cloud, for instance. It is designed to keep large, complex and repetitive tasks off your hands. And employee evaluation fits right into that bracket. A dependable tech solution like this can take over the taskmaster role, and assure thorough, meaningful and effective performance appraisals across the board!

A performance management system that works like clockwork, with literally zero staff dedicated to ensure that this happens—the ideal performance review situation, wouldn’t you agree?