For HR leaders, performance appraisal is a fantastic opportunity to reiterate a culture of support, recognition, and guidance. Both employees and employers approach it from different perspectives. For employees, it signifies the outcome of all their hard work. For employers, on the other hand, performance management is an opportunity to steer employee performance and productivity toward company growth. However, it is natural for employees to feel judged during the performance appraisal process. This is exactly where HRs will play a critical role. They must ensure that the purpose and focus of the process stay on track.
Given the importance of HR leaders in carrying out performance management activity and managing the expectations of both employees and employers, we have put together a guide to help HRs with performance appraisal for 2024.
What is performance appraisal?
A performance appraisal is a periodic employee performance review process that is conducted through a standardized flow of activities. Its primary aim is to measure the performance of an individual against the role they were hired for. It involves employees having one-to-one conversations with their direct managers. During these meetings, the two discuss the strengths, weaknesses, areas of potential improvement, and future roadmap. It allows employees to better understand how they fared against the company’s expectations. Additionally, employers also get a good understanding of how diverse and relevant their teams are.
Some of the benefits of performance appraisal are briefly listed below.
- Employees get first-hand feedback and review of their work over the last few weeks, while also getting a clear understanding of company expectations from their role.
- Employers can use appraisals strategically to identify the resources that are not up to the mark so that they can let go of resources that will not impact the overall performance.
- Employers can also identify the top performers within the organizations, which will help them plan tailored engagement or benefits programs to keep them motivated.
- With performance appraisal, employees get set objectives and goals, so that they can focus their efforts accordingly.
- Regular review of employee performance ensures that they constantly work towards improving their efficiency to meet expectations.
- Performance appraisal helps both employees and employers identify the areas of improvement and the need for professional training or courses.
- Employers can understand if they need to optimize resource management by verifying if the existing workforce is able to meet business goals.
Types of performance appraisal
Although managers must regularly review the performance of their teams, performance appraisal is the ultimate discussion on employee performance. Since it must be executed through a templatized format, HR leaders take the lead on how exactly the performance review is conducted. Below are some of the famous appraisal methods.
Self Assessment Review
As the name suggests, this performance appraisal type involves employees noting down their achievements, work highlights, and also areas of improvement. The assessment is then used as the base for reviewing employee performance. While it gives employees freedom and flexibility to narrate their list of accomplishments, it can get tricky. You see, employees who are modest may downplay their achievements. Reviewers may view this as underperformance. The lack of context can be a great challenge that can be overcome through open discussion.
Peer Assessment Review
In a peer assessment review, an employee is assessed by their team members. The purpose of having peer reviews is to establish a collaborative workplace. It gives employees a chance to recognize and appreciate the hard work of their co-workers. However, that doesn’t always happen. For example, if an employee has a grudge against a fellow employee, they may give a bad review only out of their ill feelings.
360-Degree Feedback
In the 360-degree feedback method of performance appraisal, an employee is reviewed based on feedback from team members, colleagues, subordinates, and managers. The idea is to assess an individual on multiple fronts to build a balanced view of their performance. Given the scale of operations, HR leaders take the lead in running the entire appraisal process under the 360-degree feedback method. Since the concerns raised in the earlier two methods are valid here too, companies can design questions around the strengths of the individual, and avoid downsides.
720-Degree Feedback
In simple terms, the 720-degree method comprises twice the amount of feedback to properly assess an individual. Here, the scope is extended beyond colleagues to include sales associates, customers, third-party vendors, and financial institutions. However, this performance appraisal method is not applicable to all employees.
Behaviorally Anchored Rating Scale (BARS)
BARS is a comparative performance appraisal. That means, companies review an individual’s efficiency against examples of behavior anchored to numerical ratings. In this method, the questions are centered around hypothetical questions or situations to assess your behavior and performance.
Management by Objective (MBO)
MBO is a thorough and systematic process of assessing employee performance. In this performance appraisal method, employers sit with an individual to establish objectives and timelines to achieve them. All through the months, employers and HR leaders monitor and evaluate the performance to share feedback. Ultimately when the review occurs, the individual is assigned a rating after a detailed discussion on the progress.
Improving performance appraisal process in 2024
Mastering performance management is important for HR leaders to ensure both employees and employers get through the process satisfied and motivated. Performance appraisal is even more important in view of current market volatility and other disruptions.
HR teams are tasked with planning and executing robust performance management programs to strengthen employee-employer bonding, improve engagement, and nurture workplace culture. However, the performance appraisal process can prove to be a heavy load for HR teams to manage hundreds of review forms and ratings. Additionally, ineffective communication can make things difficult. You can avoid these issues with an employee rewards platform like Zaggle Propel, which will automate employee engagement, communication, and peer reviews.
With Propel, you can customize the workflow of your employee appraisal method to meet your needs. It allows you to gamify your employee performance by tracking and rewarding milestones along with implementing peer reviews. Propel enables you to conduct on-demand polls, surveys, and announcements, which you can configure based on your performance management strategy.
Learn more about Zaggle Propel here.
