Performance Appraisals – How to Make Them Work For You 1-800-COURSES www.globalknowledge.com Expert Reference Series of White Papers Introduction Performance Appraisals. Two words that can make the hair stand on end for both employees and managers. Poorly done, performance appraisals can leave you with underperformers who lack the direc- tion to change their behavior, good performers who feel unrecognized for their work, and, worse yet, problem employees who should be dismissed, but a lack of appropriate documenta- tion prevents this. Performance appraisals can be a rewarding experience for both the employee and employer if the appraisals are carefully planned, geared toward the right objectives, and form part of an ongoing process aimed at continual performance improvement. Purpose of Performance Appraisals Performance appraisals provide a review of how well employees are able to meet expectations. Most organizations have a general idea of what target performance looks like but fail when it comes to communicating this target. Imagine your job is to sell tires and you sell more than anyone else. You rule! What if you did not know that management expects you to concentrate on selling the more expensive brands, that something about your work behavior alienates your colleagues, and that your lack of attention to detail and paperwork creates confusion for other people? But you did sell the most tires, so what’s the problem? Employees need a detailed plan to show them how to succeed at their jobs. They need specif- ic targets in all areas of responsibility and they need to know where they stand at any given time. There are three reasons why employers need to use performance appraisals. 1. To set performance standards and, in some companies, form the basis of a reward system. 2. To form the basis of a coaching plan. 3. To document poor performance as part of a dismissal process. Steve Lemmex, Global Knowledge Course Director, PMP Performance Appraisals – How to Make Them Work For You Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 2 Part 1: Preparing for the Appraisal Collecting Background Information One of the most difficult aspects of conducting the performance appraisal is substantiating the performance of an employee, whether positive or negative. Unless you have a consistent, organized method of collecting information, the performance appraisal will usually be based on recent incidents or those that stand out in your mind. This will provide an unfair evaluation of performance. In order to collect information on employee performance, you must look to several sources: Incident Reports/Praise An incident report should be used to collect both negative and positive feedback from col- leagues, management, and the employee’s peers. These reports should provide the basic details, the context in which the incident happened, the date and time, and what was done about it. When performance appraisal time rolls around, these incidents will form the basis of their appraisal. There should be no surprises to the employee! With continual communication, they should always know how well they are performing. Incident reports could include: • comments from peers, other supervisors, or management • comments from customers • examples of work performed • how the employee handled difficult situations • positive and negative examples of work behavior Job Description The job description is a key element for preparing a performance appraisal because it captures the job responsibilities and expected behaviors. Make available to the employee changes to a job description as soon as they are approved. Previous Evaluations It is a good idea to review previous evaluations to see past performance; however, you must be careful not to rely too heavily on these documents. Previous evaluations can influence your opinion whether they were written by you or by a previous supervisor. Employee Self-Assessment You might think that giving employees the chance to self-assess their performance is simply an opportunity for them to show how wonderful they think they are, but you would be surprised at what they reveal. Employees should be given the performance appraisal form and an explana- tion of its scale and be asked to evaluate themselves on each of the criteria. They will need to provide some detail to justify the evaluation they have given themselves. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 3 The supervisor will be able to spot discrepancies between his or her evaluation and the employee’s and be prepared to discuss them. The employee should be asked to comment on: • any accomplishments or training they have taken during the current review period (includ- ing on-the-job training) • career aspirations • factors that have impacted their ability to perform (both positive and negative) • how they feel that the department can be improved • how they feel they are being managed Preparing the Appraisal The most important point when preparing an appraisal is that it must be done on an objective basis. Objective factors are those that are easily measurable and tangible, such as atten- dance, production rates, quality, response rates, and accuracy. Avoid subjective factors such as attitudes, personality, adaptability, and opinions, since they cannot be defended. You must assess job performance – not personality! If you dislike an employee, it is easy to veer off-track and focus on personal characteristics instead of job performance. Although his or her personality may be a factor in poor performance, do not assume it. Make sure that your objective observations prove it. While filling out the appraisal form, first write the comments for each piece of criteria that sub- stantiates the employee’s performance. Stick to observable, verifiable facts, not opinions. Once that is done, choose the appropriate value from the scale indicating performance. Done in this order, you are rating on detailed observations, not simply picking a value and substantiating it. (This really makes a difference!) Next, review your comments and make sure they do not contain inflammatory statements. Confirm that you were objective in your evaluation. In many organizations, the draft appraisal would be shown to your manager prior to reviewing it with the employee. The draft appraisal should be given to the employee to review and pre- pare comments prior to your meeting. Remember – no surprises! Now have the employee compile his or her self-assessment. It is important to know how they feel they are performing. This gives will alert you to the points you will need to concentrate on in your upcoming discussion. The employee’s self-assessment should be delivered to you with plenty of time for you to review it before the performance appraisal meeting. Part 2:Administering the Appraisal Conducting the Actual Performance Appraisal Meeting This part of the process can be intimidating for the employee and uncomfortable for the super- visor. Having thorough documentation to back up the comments on the appraisal will make it less emotional and more professional. Schedule sufficient time to discuss the appraisal. Do not rush! Employees need to feel that this is important to you and worthy of your time. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 4 Start by explaining how you compiled the appraisal. Make sure that they know this is not just your opinion but a comparison of expected performance and observed behavior. Be prepared to defend your comments and ratings. You should have your documented facts available to review. Remain flexible, and listen carefully to their comments. If you get to a point where you cannot agree, you need to agree to disagree and move on. You are the supervisor and it is your responsibility to complete the appraisal. Meeting Tips • Use behavioral examples to maintain an objective demeanor – instead of saying “you are impatient,” give examples that demonstrate the behavior, such as “you do not let people finish what they are saying,” or “you do not give reasonable deadlines for projects.” • Suggest alternate positive behavior – once you tell them what you don’t like, make sure that they know what behavior you expect. • Provide positive reinforcement – do not focus only on the negative aspects of their per- formance appraisal; make sure to emphasize the positive as well. • Encourage two-way conversation – use open-ended questions to draw out their opinions during the meeting. Avoid questions like “are you happy with this evaluation?” Instead, draw out their thoughts with questions such as “How do you feel I have evaluated your performance?” • Respect the employee’s self-esteem – it can be difficult to discuss weaknesses and many employees may get defensive. Provide positive support by showing them you are willing to work with them in their efforts to succeed. • Don’t guess at their motives – ask. Hopefully the conversation will reveal the motives for their behavior. You’re Not Done Yet! Once past performance has been completed, it is time to determine the next steps. Employees who have met or exceeded their performance objectives will need a development plan that continues to encourage this good behavior. Poor performers will need their development plan geared toward achieving their performance objectives. Once the development plan has been sketched out, it will be time to set the performance objectives. Create a Development Plan The development plan can be used to prepare a top performer to advance to another level in the organization and take on additional responsibilities. It can also be used to provide the underachieving employee with the skills to perform to the expected level. The development plan should outline specific tasks and activities to be undertaken over a given time period: six months to one year in most companies. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 5 The development plan could include: • training – internal or external courses • on-the-job training • self-study • attendance at conferences and meetings • coaching sessions • job shadowing Create the action plan with the employee. List the steps you mutually agree upon to achieve the desired objectives. Get commitment on the action plan and ensure that the employee understands and agrees. Have the employee describe the action plan out loud – people remember what they say, not what they hear. Set Performance Objectives Performance objectives will guide the employee’s development for the next time period and form the basis of the next performance appraisal. So what is a performance objective? Each is a measurable, expected result that an employee must be able to achieve in a specific time period. When agreeing on performance objectives, determine what you want to focus on and consider the following: • Target one or two areas – do not overwhelm them with trying to fix everything at once. • Determine how practical the goal is – is it reasonable and realistic that the employee can reach these goals? Consider the consequences of not reaching these goals. If there is lit- tle impact, then perhaps the goal is not reasonable. • Spell out the action steps – map out a strategy, allowing for some flexibility, on how to reach the goal. • Establish a deadline – make sure to set a time to both accomplish and review the out- come of the goal. (Without deadlines, most work would never be completed!) • Show how the development will be measured – they need to know so that they can also monitor their progress. • Provide support – outline the support available for the employee to achieve these goals. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 6 Part 3: Ongoing Performance Management Review Regularly The review period continues throughout the year with you collecting documentation, and moni- toring and assisting your employees to achieve their goals. Give Continuous Feedback This is a crucial part of working with employees, so keep in mind the following tips: • Give feedback at an appropriate time – usually right after a task has been performed (either correctly or incorrectly) – do not save these up. • Prepare the climate for discussion – there is an old adage, praise in public and correct in private. Be firm, fair, and honest. This does not mean be blunt. A gentle approach works best. • State what needs to be improved – review the performance observed and the standard – what needs to be improved, why, and how can they improve it? • Ask questions – make sure that they understand what you’re saying. With an open dis- cussion, they can provide you with valuable information regarding their performance. Avoid putting them on the defensive. • Express confidence that they can achieve the performance goals. • Follow up on your discussions. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 7 S Specific Clear and concise; linked specifically to the departmental goals in terms of quantity and quality. M Measurable If you can’t measure it, how can you manage it? Think in terms of measurable, observable behavior. A Attainable Set goals that help the employee to stretch his or her job experience, but don’t overdo it. Putting too much stress on an employee can cause this objective to back- fire. Keep in mind the satisfaction you feel in achieving or exceeding your goals. R Relevant The objective should relate directly to the overall developmental goals. Will it help in the current position or in another position within the organization? T Timely Are the time frames realistic and attainable? Does this objective warrant the investment of this much time. Using the S.M.A.R.T. Formula for Creating Performance Objectives A simple way to develop solid performance objectives is to follow the SMART formula. Good performance objectives have the following characteristics: Tips,Tricks, and Traps with Performance Reviews Keep these points in mind when evaluating employees to ensure that you have provided them with an objective review of their performance: • Do not compare employees – rather compare the employee’s behavior with the expected job performance. • Address the behavior only – not personality or attitude (“does not pay attention to detail” rather than “lazy”). • Base your comments on facts and observations – not generalities (“you have been late to the last five project meetings” rather than “you never get to meetings on time”). • Compare the evaluation with others you are doing to ensure that you are applying the same criteria to all employees. • Never use inflammatory wording – avoid words such as lazy, sloppy, ignorant, and rude. • Do not shy away from giving praise – this can be harder than you think, but it’s important that you take the time to do it. Performance Review Traits to Avoid Here are some traits that you want to be sure do not creep into your evaluations: • Recentness – basing your evaluation on recent events because of your poor record keeping. • Similarity – the employee is just like me (whether good or bad). • Halo/horns – coloring the entire evaluation by being overly influenced by one trait. • Initial impressing – letting a first impression be a lasting impression. • Central tendency – playing it safe with a middle-of-the-road evaluation (choosing average when not sure). • Attribution – attributing his or her success or failure to external factors. • Stereotyping – all engineers are analytical; all sales people are motivated. Learn More Learn more about how you can improve productivity, enhance efficiency, and sharpen your competitive edge. Check out the following Global Knowledge courses: Management and Leadership Skills for New Managers Communication and Negotiation Skills People Skills for Project Managers PMP Exam Prep Boot Camp For more information or to register, visit www.globalknowledge.com or call 1-800-COURSES to speak with a sales representative. Our courses offer practical skills, exercises, and tips that you can immediately put to use. Our expert instructors draw upon their experiences to help you understand key concepts and how to apply them to your specific work situation. Choose from our more than 700 courses, deliv- ered through Classrooms, e-Learning, and On-site sessions, to meet your IT, project manage- ment, and professional skills training needs. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 8 About the Author Steve Lemmex is a certified Project Management Professional (PMP) with 19 years of experi- ence as a Management Trainer and Project Management consultant. He was owner and man- ager of Lemmex & Associates Limited, a consulting firm that offered more than 60 manage- ment, business, and interpersonal skills courses to both the private sector and government. He authored Global Knowledge's Management and Leadership Skills for New Managers, Advanced Management and Leadership Skills, and Negotiation and Communication Skills courses. Steve has taught more than 2,500 custom and public courses for thousands of partici- pants in North and South America. Copyright ©2005 Global Knowledge Network, Inc. All rights reserved. Page 9 . of an ongoing process aimed at continual performance improvement. Purpose of Performance Appraisals Performance appraisals provide a review of how well. appropriate documenta- tion prevents this. Performance appraisals can be a rewarding experience for both the employee and employer if the appraisals are