Getting More out of Employee Appraisals in 2014

by Connie di Primio, Customer Account Manager at Halogen Software

Where has the year gone? It is almost time for employee appraisals again. As an HR professional, you are in a strategic position to help managers and employees recognize and reap value from a process that for many feels like a necessary administrative evil. And, while you are at it, why not use the process to gather valuable information to help with your organization’s overall HR strategy?

An essential part of an integrated talent management strategy
Employee appraisals bring the most value when, rather than seen as isolated events, they are integrated as an essential element in a comprehensive performance management process that itself is part of an end-to-end talent management strategy that includes recruitment and selection, rewards and recognition, employee development and succession planning.

Potential insights from employee appraisal data
There is much information that employee appraisals can supply to help drive an effective Talent Management strategy. Collect and analyze performance appraisal data across the organization to:

Identify high performers who may become part of a high potential candidate pool that can provide successors to critical roles.

• Identify areas of high and low performance within the organization. Examine these closely  to determine the best strategy for taking advantage of strengths and mitigating weakness.   
• Assess leadership. Appraisal data can yield important information about the supervisors and managers who deliver them. A single manager with consistently highly rated employees may be one with effective leadership who can be further developed and advanced and/or serve as a mentor to those who may be struggling with the process. A caveat to investigate is whether the high ratings represent real data or are the result of an “easy grader” who doesn’t understand or value the performance appraisal process.
• Similarly, supervisors and managers whose employees are consistently poorly rated may need help in learning to coach their employees to higher performance or, if they are “tough graders,” in recognizing and appraising good performance.
• Identify training and development needs. Appraisal discussions can be opportune times to discuss employee development plans. By rolling up development information, HR can identify training and development needs to make the best use of the training budget. A pattern of low performance in certain skill areas can also be a clue that training and development is needed here.
• Identify retention risks. Consider providing tools and instruction to supervisors and managers to enable them to assess levels of retention risk among high performing employees and those in critical roles. Just opening the discussion with employees about their ambitions and passions can go a long way to encouraging employees to stay in an organization that wants them to succeed.

Getting good data

The old adage “garbage in / garbage out” certainly holds true when attempting to gain insights from performance appraisal data across an organization. Fortunately, the steps that HR can take to ensure good data will also help managers and employees get the most out of their annual appraisals. Here are some ideas to improve the employee appraisal process:

• Provide descriptions and rating criteria for critical competencies. This will help managers and employees to identify and understand what key competencies are required for success in their current role as well as one they may have their eye on for the future. Include descriptions of observable behaviors that indicate lacking, developing or proficient levels of the competencies.  
• Coach managers in the process and hold them accountable for giving effective appraisals. New managers in particular, especially those who are now appraising their former colleagues, will need help in evaluating performance and providing effective feedback.
• Gain input from multiple sources. Provide tools so managers can solicit performance input from employees themselves as well as key customers and teammates who may be able to fill gaps in the manager’s knowledge of their employees’ performance.
• Invite feedback on the process from managers and employees for continuous improvement.

Taking the necessary steps to ensure you get good, high-quality data out of your performance review process in 2014 will yield some great results that will help drive your business forward.