How to Improve the Performance Appraisal Process

A recent article in Governing explored how “local governments are changing the frequency of performance evaluations, who receives them and what they're assessing.” To me, this is definitely a good thing. The current process in the federal government of issuing a relatively uninformative mid-year review followed six months later by an end-of-year appraisal has generally been both painful and ineffective.

There are a number of reasons why the process does not work very well. But what can be done to improve it?

In designing an effective performance management system, I abide by several key principles:

• Everyone should be treated the same, whether management  likes them or not.
• All actions should be transparent.
• Employees should know what they are expected to accomplish, and the performance standards that are set for them should align with the organization’s goals and objectives.
• Employees should receive frequent feedback so they know how they are doing. 
• All actions should be predictable, especially when employees are given frequent feedback.
• There should be reliable consequences for every level of performance.

Creating Transparency

To establish a performance appraisal system consistent with these principles, management must first ensure that it has measurable performance standards that are clear, easy to understand and relatively simple to track. That’s not difficult for jobs where productivity and accuracy are easily measured (e.g. claims processor), but it’s not so simple for jobs where success is less easily quantifiable (e.g. program analyst, employee relations specialist). 

For these types of jobs I recommend three types of measures: 1) a simple evaluation sheet that assigns a number based on a scale of 100 for the quality and timeliness of any project completed (or a random sample of projects if there are many); 2) a customer evaluation sheet that rates the employee based on the quality of service they provide (internal or external customers or both); and 3) a supervisory judgment, with examples cited, for softer measures such as cooperation, teamwork and organizational support.

With such measurable standards, management can then compare the ratings it assigns to each employee relative to their actual performance and ensure that everyone is being treated fairly and by the numbers. However, employees will not really know if the system is being applied fairly because they will only know how it is being applied to them. Thus management must find a way to make its actions transparent.

That is why I believe in posting everyone’s performance within a team or unit, especially where there are jobs with more than one incumbent. (Anonymity can be preserved by assigning employees symbols or numbers when posting performance data.) I recommend taking this approach for three reasons: 1) Everyone will know exactly how they are doing relative to their peers. They will have the same overall information as managers and will realize that management is committed to treating them fairly. 2) Many of the employees will look to learn from the top performers or pull up the bottom ones. 3) It will put supervisors on notice that they are expected to treat everyone fairly and that many people will be paying attention. 

Setting Expectations

When designing performance standards, you should start with the national goals and objectives. That is because you want to have a clear line of sight from the top of the organization down to its business lines, field stations, services and divisions, teams and individual employees. In this way you will have a consistency of purpose—everyone will be focused on the same goals.

You should develop and distribute the new performance standards as close to the beginning of the new appraisal period as possible, since you want to begin addressing the new year‘s goals quickly. 

I also strongly encourage posting the national, station, business line and team goals throughout the organization. Better still, senior leaders should meet with each organizational entity and explain what the goals mean and where they came from so they will understand how everything fits together.

Employees want to know how they are doing and if they receive frequent feedback (I recommend once a month), there will be no surprises and no secrets.

I also suggest providing employees with a brief, monthly feedback report. Such a report should correspond to each employee’s performance standards but need not be very detailed if the employee is doing well. If, however, the employee is struggling, this document will let them know exactly where they are deficient. It will also provide management with documentation if remedial action is warranted.

Eliminating Surprises

When you take the above steps, people will feel less anxious and believe the organization is committed to fairness and equity. Moreover, they will be able to predict what their appraisal will be, whether they will receive an award, or if they need to improve their performance. 

With greater transparency and predictability, the number of grievances and EEO complaints are likely to decline. The system will drive the right behavior and management will not have to struggle to convince employees that the system is fair.

When you have a system that is numbers-driven and fairly applied, it becomes easy to ensure there are reliable consequences. Simply put, the top performers will be rewarded; average employees will retain their jobs, receive grade increases, be able to compete for promotions and know what they need to do to be deemed elite; and poor performers will understand what they need to do to bring their performance up to an acceptable level.

The system I have described has been used to great effect. Should you adopt its principles, your organization will benefit and so will employees.

Stewart Liff is an HRM, visual performance management and team development expert. He is the president and CEO of Stewart Liff & Associates, Inc. and the author or co-author of seven books, including Managing Government Employees and A Team of Leaders. He can be reached at Stew@stewartliff.com.