When you set up a new performance appraisal system, you need to gather input from both senior management and employees. You also need to make sure that the program is workable and well communicated throughout the organization. The success or failure of an appraisal system hinges on factors that are based more on company issues than on the system itself.
Enlist the support of senior management in employee appraisal
Because appraisals can be a difficult sell to both employees and managers in some organizations (especially in companies that have never formalized the process), you have to make sure early in your development process that senior management is willing to give the initiative strong support.
Explain how the particular approach you’re recommending is tailored to the company’s business and culture and how this process will support them in driving to a higher-performing company.
Choose employee performance measures with care
The cornerstone of a successful performance appraisal process is the criteria used as the basis of evaluation. Here are some of the key factors to bear in mind when formulating criteria, along with questions you should ask yourself with respect to each factor:
Core values: Do your criteria reinforce the core values and behaviors that you want your employees to exhibit?
Job relevancy: Are the criteria connected to strategic business goals? How are these big-picture goals linked to successful work performance?
Feasibility: Do employees have the resources, the training, or the autonomy required to meet the goals?
Measurability: Can the behaviors that underlie each performance be observed, measured, and documented?
Develop a fair and practical tracking mechanism for employees
In small companies, when supervisors and employees are working closely together, following day-to-day behavior isn’t much of a problem. In larger companies, though, tracking can become a key issue. Essentially, you need a reliable and fair mechanism to ensure that the results of the appraisal are an accurate reflection of day-to-day employee performance.
Here are some questions to ask yourself when confronting this issue:
What specific procedures will be used to track and monitor behavior?
During what specific periods is behavior going to be tracked and observed?
What training, if any, do managers need to carry out these procedures without placing undue pressure on themselves?
To what extent will employees be made aware that their behavior is being observed and measured?
What recording mechanism will be used to document performance?
Where is the documentation going to be kept and what assurances of confidentiality, if any, will be given to employees about the tracking procedure?
Resist the temptation to create the perfect system. Keep in mind that no matter how hard you try to quantify the measuring of any performance criterion, you can never remove the human element. It’s not a science. Don’t shoot yourself in the foot by creating a system so complicated that no one will take the time or effort to learn it.
Develop a communication game plan
Most appraisal processes live or die on the basis of how clearly and openly you communicate the aims and mechanics of the system to employees. At the very least, everyone involved in the process should be aware of the following information before you actually launch the program:
The overall goals of the initiative
How employees themselves will benefit
How performance criteria will be developed
The length of the appraisal periods
The degree to which appraisal results will be linked to bonuses, merit pay increases, and other HR-related activities
What recourse employees have if they disagree with the results
What training, if any, will be made available to managers designated to implement the program
You can communicate this information in any number of ways. The important thing is to have a communications strategy. Make sure that everyone has a clear understanding of how the program will work and their roles in ensuring the program’s success.