Do you think performance management and performance appraisal are the same? If yes, you are wrong. Performance appraisal is a part of the performance management process that happens year-round. Performance management focuses on improving the performance of an employee and enhancing the employee experience at an organization. An effective performance management system has the following features.  

What is Performance Appraisal?

A performance appraisal system is the process of assessing an employee for his/her work. The manager, who is closely tied with the employee, observes and assesses his/her work throughout the year and provides necessary feedback, guidance, and forward-looking path during the appraisal period. The manager holds formal discussions with the employee recollecting his/her achievements, performance, and areas for improvement. The manager also identifies opportunities for the employee to grow professionally. 

Purpose of Performance Appraisal System

The primary purpose of a performance appraisal system is to motivate and guide the employee in improving his/her performance. It helps organizations identify and categorize employees based on how they work. This classification helps organizations motivate the high performers and also recommend appropriate development plans and training programs to the below average performers.  

Types of Performance Appraisal System 

An appraisal does not only involve managers. It is more like an exponentially growing curve – each vertex is like self, peers, managers on the graph who add value to the employee appraisal process and help them grow along the curve. 

Here are a few types of performance appraisal system. 

General Appraisal

It is an ongoing communication between the manager and the employee throughout the year. At the end of the year, the manager and the employee will hold a meeting and determine if the pre-set goals and objectives were met. Then, the manager provides feedback and sets new goals. The managers can also recommend development plans and training programs to the employees to help them improve their skills. 

360-Degree Appraisal

360 degree appraisal allows peers, primary manager, cross-functional manager, direct reports, and other internal and external stakeholders to share feedback on an employee’s performance and team behavior. This type helps an employee to learn his/her strengths and weaknesses. The feedback is then reviewed by the manager during the appraisal process. 

Technological Performance Appraisal

It assesses technical expertise/capabilities of an employee. The technical expertise will be given importance over other skills and competencies during the appraisal process to identify how sound he/she is technically. 

Employee Self-Assessment

The employee assesses himself/herself and it is finally compared with the manager’s completed assessment results. The self assessment process is followed by discussions and if there are differences, manager speaks to the employee about it. 

Manager Performance Appraisal

In this type, managers go through the appraisal process. It is the role of the manager that is very crucial in handling both the team and the client. Manager has to satisfy the clientele without disrupting the (team’s) employee morale. Most often, manager appraisal process involves feedback from the respective team members and sometimes from the client as well. The feedback forms from employees can also be anonymous. 

Project Evaluation Review

This is one of the best ways to identify how good an employee is at work. Rather than to wait to review an employee end of the year, it helps evaluating employees end of each project. This review process increases the commitment of the workforce and keeps them engaged.  

Sales Performance Appraisal

A sales person is judged by the goals he/she has set versus his/her results. Salesmen are closely held to the financial goals of any organization. The manager and salesperson must find out ways to achieve goals prior to which they must set realistic goals. 

Well, let me now tell you how to design a review form. 

How to structure a REVIEW FORM?

Business needs, organization structure and even work etiquette might differ depending on the culture adapted within the organization. But what remains constant is the structure of the review process. Let me give you a clear picture of how a review process should be: 

I shall start with goal setting as no review takes place without goal in place. 

Goal setting:

Every organization forecasts future and has standard goals to be achieved for every financial year. Goal (with respect to organizations) is nothing but how an organization should be end of the year. All the employees of the organization are educated on the goals to work towards it. The end result is evaluated based on the goals achieved. 

Also Read: How to Help your Employees Set their Goals? 

Technical Skills:

It is really important for an employee to be proficient regarding his/her technical expertise before getting handle on work. Technical skills do not just pertain to IT services alone where an employee should be sound enough in his/her particular work domain (either programming language or operating system). It spreads across every organization (w.r.t financial/banking services, one should be technically proficient handling accounts; a business analyst must be technically sound in analytics and reports, etc.) 

Soft Skills:

It is very essential as every employee will have to speak to clients/handle client calls, narrate the product description, walk clients through the work flow, etc. 

What went well?

It is an important question that should be appended to any review process as this figures out if the goal associated with an employee is achieved or not, status of the goal, time spent on goal, time elapsed on goal and has the work of employee been reviewed by the manager. 

What could have gone better?

After getting a hold of what went well, the next step is to find out how things could have gone better or how can it be made better in the future. It is a simple process that helps employee understand what he/she is good at and areas where improvements are needed. 

Any specific needs?

Based on the review provided by the manager, the employee can be put to training if he/she lacks technical/soft skills. If the manager feels that an employee requires some form of additional support, he can very well help employee through it.