​

Employees who need direction rely on their leaders to give them feedback about their performance and to mentor them. But leaders are often not prepared or trained to conduct the type of employee review that ensures employee development. Instead, the appraisals become confrontational and judgmental; goals are not clear; neither person is prepared; and the discussion of problems occurs when it’s too late to do anything about them.

To avoid that type of scenario, managers need to establish a well-thought-out performance-appraisal system, set clear goals, conduct timely reviews, and develop follow-up action plans.

THE SYSTEM. The first step toward developing an effective performance-appraisal system is to have clearly defined job descriptions that specify the tasks, functions, and responsibilities of each job. Many organizations start by defining roles and responsibilities as they relate to the level the person holds in the organization such as executive, manager, or employee. Other companies choose competencies that address certain functions of the organization, such as accounting, manufacturing, human resources, or sales.

Once decision makers have defined the job, the next step is to decide how to measure performance, also referred to as measuring competencies. Usually competencies relate to one of four issues: the ability to get results, the capacity to form relationships, the ability to make decisions, and the quality of leadership. Specific competencies might also include business acumen, integrity, and teamwork. There should be eight to ten competencies on which a person’s performance can be assessed.

The next step is to establish a rating scale. The most basic approach is a three-point scale, with the highest rating of three points indicating that the employee exceeds expectations in that category; two points means the employee meets expectations; and one point means that the employee fails to meet expectations.

A better option, however, may be a four-point scale, because it gives more options for evaluation and prevents the evaluator from relying on a middle-of-the-road review.

Once the criteria for evaluation have been determined, the decision makers need to set the timeline for when reviews will be conducted.

In general, four meetings per year work well. The first is a goal-setting meeting, the second addresses progress on the goals, the third brings up any problems that might interfere with the end-of-the-year appraisal, and the final one ties the progress to rewards. This approach does not preclude ongoing feedback, which should be given to employees between these formal appraisal meetings. The more frequent that the feedback employees receive is, the greater will be their productivity and morale. That result more than compensates for the time committed to this process.

GOALS. Goal setting ties individual performance to the organization’s mission, vision, and values and links short-term objectives to long-term targets. Staff will be most committed to goals they helped construct. Supervisors should, therefore, work with each employee to clarify and tailor that person’s goals.

A clear statement of the goals is also important. Well-written goals create opportunities for objective, fair dialogue; they define the scorecard that will be used to determine rewards; they energize and motivate; and they focus efforts.

Goals should be specific, measurable, attainable, relevant, and timely. Specific and measurable means that the goal is concrete, clear, and descriptive to the point that results can be measured. For instance, giving feedback that an employee “needs to be more positive and have a better attitude” is not helpful. Identifying the particular behaviors in need of improvement is a better option. For example, the supervisor might point out that the employee should greet customers, smile, and say “thank you” more often.

Goals must also be achievable. Here, perceptions may differ. The supervisor’s perception of results that are achievable and realistic might differ from those of the employee, for example. If there is disagreement, the supervisor needs to explain what specific steps are involved so that the employee can see how to reach the objective. If additional training is needed, the supervisor can acknowledge that and discuss when and how the employee will be able to get training.

Goals must also be prioritized. Supervisors must make sure that the timeliness of an issue is the first element that is considered. By doing this, employees complete critical tasks first, meet deadlines, and learn to organize their time.

In addition to establishing a timeline, the supervisor should address any other criteria or parameters that might apply to achievement of the goal. For example, if a supervisor needs a task to be completed without staff overtime or with the firm’s current equipment, these limiting conditions need to be spelled out so that no one is surprised. If there are disagreements about these conditions or if the employee considers these conditions unrealistic, the goal-setting meeting, not the end of the year review, is the time to discuss those issues.

One way to make sure that this issue is addressed is to ask specific questions at the goal-setting meeting. For example, the supervisor can ask what factors might interfere with the achievement of specific goals.

Employees often misunderstand their parameters for accountability and decision making. They either overstep when boundaries are not clear or they err on the side of caution. To avoid that type of problem, both parties need to clarify which decisions the employee will make alone, which ones will require notification of the supervisor, and which ones need to be cleared with senior managers.

THE REVIEW. An appraisal system is only as good as its execution, and a big part of the process is feedback. Beyond formal meetings, feedback should be ongoing.

When an employee makes a mistake, addressing the problem right away is the surest way to ensure that corrective action is taken. Similarly, when a person excels at a task, complimenting and praising the efforts immediately will show appreciation and encourage more of the same.

No matter how frequent the casual feedback, however, the formal review sessions are critical to the employee’s development. These should occur throughout the year to avoid the end-of-the-year angst and allow employees to have time to take corrective action.

The performance review should be focused on goals, balanced in nature, and candid. People need to hear the things they are doing well so that they can leverage their strengths, but they also need to identify improvement areas.

Ordinarily, going through each of the goals that were set at the beginning of the year is unnecessary in these interim reviews. More often, one or two goals will be a more obvious concern. Starting the conversation by identifying those will help to focus the discussion.

Another critical part of the review is to listen to the employee first and to elicit that person’s ideas and opinions. Starting on a positive note can be helpful in this step. For instance, after identifying the issue, the supervisor can say, “Brag on yourself a little. I know you’ve done a great deal of work on this project, but I would be interested in hearing you describe exactly what you’ve done.”

This approach accomplishes two things. It will help employees know that the supervisor is listening, and it will give the supervisor a chance to gather more information. It’s also the employee’s chance to make sure that accomplishments are not overlooked or forgotten. Supervisors might also let employees know in advance that they will be asked this question.

Before moving to the next step of the review, the supervisor should take advantage of the opportunity to address as many issues as possible with open questions. Asking the employees to talk about their perceptions of problems will reduce the defensive reaction that can accompany the boss’s giving a solution. For example, the supervisor can ask, “What things do you still need to do to improve?” or “What are some ideas for correcting that problem?”

Another part of this second step is paraphrasing what the other has said. Often a summary statement is more powerful when followed by another open question. For instance, the supervisor can restate the message by saying, “So you’re not worried because you think this will work if you give it enough time. How could you address the deadlines that are in place already?” A series of these kinds of statements and questions can frequently lead the employees to conclusions they had not previously considered.

Ideally, the discussion to this point should have implied a course of action for the employee. If that hasn’t happened, the next step is to give that direction.

Once again, clearly defining the specific behaviors that the employee should address will help to keep the discussion focused. If the supervisor disagrees with the employee’s assessment of the situation, if there has been a shift in priorities, or if the two disagree on action steps, this is the time for the supervisor to begin a discussion about how to resolve differences.

The employee needs to have a clear understanding of what the supervisor expects. Employees report that they appreciate this level of candor when there’s still time to take corrective action. For example, the supervisor might say, “I would like to give you the same raise that you received last year. However, I wouldn’t be able to do that if this were your end-of-year evaluation, because your performance has not met last year’s level as yet.”

This would be an eye-opening message that would resonate with the employee. It might motivate the person to ramp up productivity before the evaluation.

ACTION PLAN. The first phase of action planning occurs, of course, as part of the goal-setting meeting. But as employees progress, it is important that there be an action plan to keep them on track and to help them improve. The action plan is a fluid document that should change with new information, such as recent accomplishments and unexpected events. Therefore, at the beginning of each new yearly appraisal cycle and at each subsequent review meeting throughout the year, the supervisor and employee need to identify the two most important goals and have a timeline and plan for achieving those objectives.

Sometimes the timeline will be obvious. If a person wants to finish a course of study, for example, the beginning and ending date of the class will be established. Other timelines will need to be created, often in response to new initiatives or demands. For example, some people have the capacity to break large projects into manageable parts, while others need direction from the supervisor on how to do this.

The main payoff of action planning is not the form or the document, but the discussion it requires. Through this discussion, the two parties can identify and address any roadblocks and clarify the steps involved in accomplishing the task.

The action plan should be written down so there is a tangible agreement among the stakeholders. It serves as a kind of report card for tracking results and redirecting efforts. Both the supervisor and the employee should keep a copy of the original agreement and subsequent changes.

Most performance appraisals are not what they could be, primarily because the system is flawed and the participants are not prepared. Creating a coaching culture that is characterized by clear goals, ongoing feedback, mentoring, reviews, and focused action plans is likely to create a more productive culture. Even though this all takes time and effort, the rewards are impressive.

Linda D. Henman is owner of Henman Performance Group in Chesterfield, Missouri.