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Develop a Solid Understanding of Performance Appraisal

Clean up the performance appraisal mess.


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  • London Hydro Inc.
  • Conestoga College
  • Instron Corporation
  • Forest City Enterprises Inc.
  • Etech Inc.

Your Challenge

  • The performance appraisal space is a mess of opinions, formats, methods, and techniques, making it difficult to decide on the performance appraisal approach that is best suited to your organization.
  • Most organizations have cobbled together a performance appraisal program over time and aren’t experiencing the benefits that a solid performance appraisal program has to offer.
  • A lack of understanding of performance appraisal methods, as well as rater biases and unclear goals for the performance appraisal program, can make performance appraisal a costly waste of time.

Our Advice

Critical Insight

  • Opinions on the value of performance appraisal range from those who think that performance appraisal is a panacea for all employee issues, to those who think performance appraisals should be completely abolished.
  • Line-of-business managers and HR professionals need to realize that while no performance appraisal program is perfect, performance appraisal, when done well, is a key driver of employee engagement and productivity.
  • No organization’s performance appraisal program will be exactly like another. Individual templates and processes are organic in nature and typically represent a combination of several methods. HR practitioners and line-of-business managers need to draw from the performance appraisal approaches that are best suited to their organization.
  • Informal coaching and feedback are critical to retaining and developing employees. Informal sessions should be conducted bi-weekly to provide timely feedback and enable employees to improve.
  • 360-degree feedback sessions work well in team environments and if a manager cannot closely monitor an employees’ daily tasks. Never attach salary, bonus, promotion or discipline decisions to 360-degree feedback as the evaluations will be dishonest and inaccurate.
  • Forced ranking and forced distribution are important elements to many performance appraisal programs. Use these tactics in individually competitive environments and if the culture permits it. Use them with the appropriate level of privacy applied if measures are subjective or the environment is team based.

Impact and Result

  • Get a handle on what effective performance appraisals can and should deliver.
  • Understand the benefits and challenges of performance appraisal methods, as well as how to overcome limitations.
  • Learn how to draw from existing methods as a first step towards creating a performance appraisal program that will both motivate employees and positively impact the organization’s bottom line.

Research & Tools

1. Understand the performance appraisal space

Develop an effective performance appraisal program.

2. Save time by drawing from existing performance appraisal templates

Get started on developing your performance appraisal program.

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Search Code: 23980
Published: July 13, 2010
Last Revised: July 13, 2010