Businesses often rely on performance appraisals to boost employee productivity and improve business operations. Employees are an organization’s greatest asset, and their performance in the workplace has a direct impact on daily operations and the long-term growth of the company.
A performance appraisal is essentially a review of an employee’s job performance and level of contribution to a business. Performance appraisals are often performed annually but can occur more or less often depending on the preference of the employer. With data collected over time, a performance appraisal can help business owners indicate which employees require constructive criticism and which should be rewarded for their high-achieving status.
Factors Of A Successful Performance Appraisal
Most companies have a small budget set aside for employee bonuses and raises. This means that companies must decide which employees are most deserving of these funds so that they can reward these top-performing workers accordingly. A performance appraisal can help employers evaluate staff based on behavior, achievements and overall performance over time. However, it is important to approach performance appraisals in the right way to ensure that employees walk away knowing the things they did right and where they can improve.
Some of the most important factors of a successful employee performance appraisal include the following:
Creation & Implementation Of A Clear Outline
It is natural for both managers and employees to feel a little nervous during a performance appraisal. These formal meetings do not usually occur too often in a standard workplace and both parties may feel uncomfortable with the process. Having a clear and easy-to-follow outline of the appraisal process can help ensure that the performance appraisal goes smoothly and that no important aspects of the appraisal are overlooked. The discussion will primarily be based on the manager’s observations of the employee’s performance and abilities as they pertain to the job description. This performance is then rated and directly tied to possible salary increases.
Leading With Bad News
Employees are often concerned about what negative things a manager has to say during a performance appraisal. While most people tend to start conversations with good news, it is often best to take the opposite approach during a performance appraisal. Leading the conversation with bad news helps get the information in the open and out of the way. Of course, bad news should be given in a constructive way that helps the employee improve. Once the bad news is given, the good news can be delivered. Ending the conversation with good news helps to ensure that the meeting ends on a positive note.
Involvement With The Employee
During a performance appraisal, there is often a one-sided discussion in which the manager provides the employee with the results of the appraisal. Aside from the occasional question or reassurance, employees do not generally play a major role in the communication process. However, it is important to involve the employee as much as possible during these discussions. Employees who participate in their own performance appraisal are often more motivated to improve their behavior and may feel more satisfied with the results of their review. When performing a performance review, encourage the employee to explain their side, ask questions, and discuss ways to achieve greater performance.
Giving Regular Feedback
Managers do not have to wait until performance appraisals come around to provide valuable feedback to employees. In fact, approaching performance problems as they occur is often the better solution to avoid establishing poor long-term behaviors. Regular, continuous feedback from managers encourages employees to do better and learn more about the company and their position. In addition to providing negative feedback, managers should also continually provide positive feedback for a job well done. Positive feedback also provides employees with encouragement and motivates them to continue working hard.
Documentation Of Appraisals Sessions
Businesses should also prepare documentation of every employee performance appraisal session. This document should include what was discussed during the appraisal and how this information was used to come to a decision about the employee’s future. Most importantly, it should also include decisions such as who was promoted, which salaries were adjusted and who was terminated based on performance. Once this documentation is completed, it should be stored in a central database where it can be easily accessed as needed.
Reach Out To A Professional PEO Consulting Firm
Performance appraisals allow employees and managers to come together to reflect on job responsibilities, set goals, share feedback, and identify opportunities. Creating employee performance analysis outlines and undergoing the analysis process can be challenging and often requires guidance from a knowledgeable outside party. A professional employer organization (PEO) consulting firm can help businesses with the performance appraisal process to ensure satisfactory results. For more information about employee performance appraisals or to speak with a professional PEO consultant, contact the experts at BenefitCorp today.