Commonly asked questions about performance appraisal (PA), the process behind it, why you should use it, and the software that makes it easy.
The performance appraisal process is used to document and evaluate how well an employee is doing their job based on both expectations and KPIs set when starting the job or the previous review process. Performance appraisal is typically done every year, but with some companies or employees it can be done much more frequently.
Although it varies from company to company, performance appraisals should be done at a minimum of once per year, most often on or around the employment anniversary of the employee. These can be done every quarter or every six months (depending on the role) abd may be done weekly or even monthly for employees at risk of termination.
Managers should set very clear goals and objectives at each performance appraisal. If you want your employee to achieve or complete X within the next year, you should make this clear to them during the appraisal session. On top of this, there should be clear feedback on what is going well and what needs improvement (often with recommendations on how to improve).
The purpose of performance appraisals are to give employees transparent feedback on their performance, to try and modify or change negative behaviours and reward positive ones, to provide managers with the input they need when deciding work assignments and compensation (should the employee get more/less responsibility and in the event of more, a raise).
Merit-based performance appraisals seek to take out any bias when it comes to performance evaluation. If an employee achieves KPIs they will be rewarded, if they do not achieve KPIs they will not. Sometimes there is a temptation to give raises or promotions on non-merit based items like time at company, age, past experience, etc.,. This method however focuses only on direct contribution to the company and whether targets or goals were met.
A performance appraisal generally provides employees with acknowledgement of what they are doing right and where they need to improve so that they have full transparency on how they are doing in their role. It generally provides managers with a way to identify and course correct poor performers and to reward top performers as well.
Performance appraisal software is an application or computer program that is used to automate the performance appraisal process, including: scheduling, record keeping, role clarification, self-development activities, process structure, reporting, and recording the meeting of goals and objectives.
1. Record Keeping:
Depending on the size of your team, remembering what goals were set with each individual employee over the course of the year can be an extremely difficult (if not impossible) task. Performance appraisal software keeps track of the goals and objectives that you set with members of your team, so that both you and your employee can easily go back and periodically check how they are trending towards achieving those goals (plus where they are falling short).
The ease of record keeping functionality arguably makes the software pay for itself, so it is not surprising that it is one of the most used features.
2. Clarifies Roles and Expectations:
If your employees do not know what responsibilities fall under them, it is not surprising when they do not meet their goals. For example, if Joel is not clear that his role includes monthly reports on buying activities, it should not surprise anyone if those reports are frequently late or incomplete.
By clarifying roles and responsibilities with your employees, the better they are able to meet company goals and objectives, which means better results for you and your team.
Performance appraisal software can be used to clarify what responsibilities each employee has, so that you can express clear expectations from them (eg: you own budget and we want to see 15% cost savings next quarter) and clearly know if those goals are or are not met.
3. Encourages Self-Development:
If an employee knows what is expected of them, and has a system they can login to track their progress, it encourages them to work on areas that have been marked as needing improvement. Further, they can even request or be provided training to hone their skills where needed.
4. Motivates Employees:
Not only does PA software help employees with self-development, it can also serve as a way to motivate them. When a clear path exists to the next merit-based pay increase, or that next promotion can be tracked towards, there is not surprisingly increased employee motivation as well.
5. Provides A Structured Process:
Most performance appraisal (PA) software makes the role of the manager easier by providing step by step guides to completing the PA process. Starting with documentation and the performance report, all the way through delivering the report, documenting next steps, and collecting employee feedback, can be led by the software itself.
This takes a lot of work off the plate of the manager and also reduces errors by having a structured approach that can be used for all members of the team.
6. Performance Appraisal Report:
Performance appraisal software allows for the quick generation of performance appraisal reports through pre-built templates and easy to fill forms. These reports should include employee information (name, ID, department, manager, etc.,), period being reported on, notes on the current period, goals achieved, goals missed, areas for improvement, how they demonstrate company core values (optional) and any additional notes.
Once the report is provided clear next steps should be given and any questions answered. By using software to do these reports, a digital copy is stored for future reference by manager or employee.
7. Simplifies Decision Making:
One of the most difficult decisions that a manager may face are whether to promote, reward, or dismiss a member of their team. If you promote someone who is not ready, or who does not work well with other team members, it can be a nightmare, and if you have to dismiss someone without a clear reason it can be just as difficult.
Performance appraisal (PA) software lets you know who is doing a great job, who has met all their objectives, and who is falling behind. This simplifies the promotion and dismissal process through data and transparency.
8. Identifies Top and Bottom Performers:
PA software also allows you to easily track your top performers (those always meeting goals and objectives) and those who are underperforming. This helps you to optimize your team by promoting or rewarding the best, and have performance improvement plans for those who lag behind.
9. Monitors For Change:
If an employee was historically hitting all of their targets and objectives, and then all of a sudden stops, or if someone has turned around poor performance substantially, as their manager you want to be the first to know. Performance software automates this process and typically provides insights into change in employee behavior so they can be addressed ASAP.
10. PA Scheduling
Performance appraisals are most valuable if they are done regularly and consistently. A big pain point for employees is when feedback is given at random intervals. Imagine getting a PA report once every six months, then not for 8 months or 18 months the following year.
PA software schedules these reports to make sure that employee reviews do not fall through the cracks.