How to manage performance appraisals

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Efficient and effective performance appraisals are core managerial skills. It’s an opportunity to reflect on an employee’s growth and their contribution to your business.

Key points

  • Performance appraisals are sometimes called performance reviews, performance evaluations or one-on-ones
  • It’s a chance to set goals and targets, find feedback from peers, log achievements and tackle weaknesses
  • Performance reviews and appraisals can be held annually, or more frequently

What is a performance review?

Performance reviews, sometimes called performance appraisals, are an opportunity for line managers or team leaders to review and recognise the achievements of their staff.

All performance appraisals are slightly different because they’re unique to the employee, but the topics you discuss are relatively consistent between sectors and workplaces:

  • Measurements of success
  • Troubleshooting shortcomings and weakness
  • Identifying training gaps and updating their personal development plan (PDP)
  • Peer feedback (good and bad)
  • Fulfilment of objectives and key results (OKR)
  • Embodiment of values
  • Goal setting
  • Contribution to team and business objectives

Sometimes an organisation will simultaneously review PDPs and OKRs in a performance review, so you have a blend of skills-based and data-based evidence to consider.

Over the last 30 years, the performance appraisal has been the tool of HR and management to find a consistent way to hold and record reviews, while collating evidence to feed an organisations’ training needs analysis.

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How often should you host performance appraisals?

Performance reviews and appraisals traditionally happen once a year, but successful managers use a more frequent appraisal model.

You might have ad-hoc performance reviews when:

  • There’s an opportunity to progress into a new role
  • They’re covering a senior role (acting up)
  • They want to negotiate their salary
  • They aren’t performing as expected

In any case, performance reviews are always scheduled. With advanced notice and a planned agenda, your employee can prepare evidence and notes, even rehearse what they want to say to you, so you have a meaningful conversation.

What effect will regular appraisals have?

By chatting about performance day-to-day, your people realise that performance isn’t a box-ticking exercise to please HR (or a hoop they have to leap through just once a year!)

Tell them what the business needs them to achieve for every task and project, then relate it back to their personal PDP and OKR. You’ll soon have a goal-orientated team.

Your people will gain self-awareness – their actions and contribution directly relate to the success of their team and the business.

How to prepare for a performance review

A successful appraisal relies on your managerial communication skills.

Tell your people what you’re going to cover (and the information they need to bring with them) well in advance of the review. You can both come to the table prepared with notes and questions, ready to listen and learn.

There are roughly 11 steps you can take ahead of performance reviews to be completely prepared. Here’s a template for managing an inspiring performance appraisal.

Write a detailed performance appraisal invite

The first written notice your employee will have about their review is likely to arrive via email. Tell them face-to-face when to expect the invite – it will make them feel seen and valued.

Book the review in at least a week ahead, to give them plenty of time to prepare.

Within the email, tell them specifically what to bring and also include a rough agenda. There should be no surprises in a performance review – both parties need to feel comfortable and relaxed if you’re going to achieve anything.

Prompt them to self-reflect, ask questions and evidence successes. Your invite might look something like this:

Dear John,

As discussed, I’m booking in some time for your one-on-one performance review.

We will talk about your personal development plan (PDP), achievements, and review some peer feedback from around the business. Attached is your PDP and objective key results (OKR) planning document from our last meeting. Please would you write a self-evaluation based on how you think you’ve fulfilled these targets? It would be really helpful for me if you could note any support and training you might need in future too.

Please bring project outcomes, examples of success and any other supporting evidence you would like to show me. We’ll look through it together and reposition your goals for the year ahead. 

This is a great opportunity to ask questions, so please bring those along too.

A detailed invite prompts your employee to gather their thoughts and you must do the same. Collect data about your employee’s performance and what it means for the business. That wider context allows you to unite their perspective with business outcomes and ultimately have an efficient, clear and insightful conversation.

Familiarise yourself with their job description

Before you go into a performance review, take a few moments to look at their job description. It helps you to get some empathy and see the company and role through their eyes.

  • What do they think their responsibilities are?
  • Does the day-to-day work reflect the job description?
  • Are they completing work beyond the job description?
  • Does their point of view correspond with your own?

If there’s a discrepancy between what they’re actually doing and the job description, it’s worth noting but it’s not necessarily an issue.

Job descriptions are what HR thinks the business needs, but it doesn’t always translate practically! Keep it as contextual information – if you’re employee seems dissatisfied, a flawed job description could be the cause –  reading the job description will help you fully understand their motivation and mindset.

Match their qualities with company values

Contact HR and ask for guidance about how company values are expected to translate into employee qualities.

Sometimes value benchmarks can be hard to define, so go the extra mile and pin down achievable actions to help them embody the voice of the company.

Get their projects fresh in your mind

Show them you care. Their projects are on your radar and you want to know how it’s going. Ask them to:

  • Remind you of the purpose of the work
  • What they expected the returns to be
  • Whether it’s on track
  • What have they learned so far?
  • What could be done better?

Remind yourself of their last PDP

Whether you met a month ago, or a year ago, it’s a good idea to read over the PDP and decide whether training has increased their productivity, or if little has changed.

You could also write notes about how you’ve seen them change and if you believe the learning has transferred and made a difference.

The PDP helps them to establish their existing skills and develop the skills they need. If you have some criticisms, it’s not a reflection on them, it’s just an experience or knowledge gap you can help them to bridge.

Be prepared to share an example of when you thought they performed well thanks to the training, or where they could have added more value and the appropriate training to help them in future.

Ask their peers for feedback

Collect impartial feedback about your employee from people around the business. It doesn’t need to be someone in their immediate team, but if they’re working cross-department on a project, it’s important for them to get a broad spectrum of feedback to aid their development and progression. You could ask:

Please give an example of when you worked well together.

What could be improved?

The feedback could be anonymous, but making it personal gives a meaningful, lasting impression.

Review their OKRs and targets

Your employee’s granular personal targets will be driven by overarching aims of the business.

When you’re creating new OKRs, you must always use business objectives as a reference, so that your employee is working in towards a shared goal and not fighting upstream – it just sets them up to fail and could ruffle the feathers of their peers.

When reviewing whether they met previous OKRs, scrutinise the data and pull out some contextual key points.

For example, although the business might not meet its objective, your employee may have surpassed what was expected of them and that deserves to be acknowledged.

Apply SMART goals

SMART goals are specific, measurable, relevant and time-bound objectives. It’s a clear and thorough method of relaying targets to your employee – they set expectations for performance and can be used as a motivational tool too.

Work in time for special achievements

Every employee has a sink or swim moment, where they’re forced out of their comfort zone, or forced to help out in a crisis. Make sure you take time to acknowledge these moments so they feel appreciated.

Plan what you’re going to say

Now you have all the data and surface-level insights, you need to plan what you’re going to say. This task is two-fold – you need an agenda, but you also need to think about probing questions to ask at key moments.

You can use active listening to gather meaning behind your employee’s output and actions, but this is a chance for you to speak as well as listen.

By preparing your questions, you’ll prompt your employee to reflect on the right information, so they clearly see what actions they can take and how to improve.

It will draw out how they see their performance in a wider context.

Three questions to ask in a performance review

Your questions need to be relevant to their role, or the role they’re seeking to advance to.

They need to be measured against the outcomes that the role should be generating and unique to the individual.

Just three simple questions will encourage a quality dialogue that needn’t stop in the review meeting.

The first questions drives clarity:

#1 How well do you understand the job?

This might be their job as a whole or a task. Although you’ve re-read their job description, that’s not the answer you’re looking for. Their answer should reflect what the leader or manager expects from that particular individual.

Once you’re on the same page, you can proceed to question two:

#2 How good at it are you?

This will either be an open discussion about known limitations or weaknesses or an opportunity to share some candid feedback and evidence. Now we have a gap to bridge between the managers expectations and what’s actually happening.

Time for the third question:

#3 What help do you need?

This question is an exploration of alternatives for development or support.

If every manager throughout an organisation asks these three questions of their teams, both performance and communication will open up.

It can continue on a daily basis and be applied to individual tasks or projects as well as the job as a whole.

Encourage your employees to write self-appraisals

Writing a self-evaluation is a reflective tool that helps to boost confidence and identify training gaps.

If your employee owns their strengths and weaknesses and is able to communicate them to you in the appraisal, it gives you a greater chance to support them.

If a project arises which corresponds to their skills and qualities, you can step back and watch them thrive. If the situation demands skills they don’t have or lack confidence in, you’re fully aware of their private frustrations and can step up with training and mechanisms to allow them to succeed.

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Andrew Wallbridge
Andrew is TSW's Head of Leadership & Management. He’s coached and mentored leaders and the senior management teams at international brands.
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