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Conducting Effective Performance Appraisals

The performance appraisal is one of the tools used for managing employee's performance. It is sometimes called performance review or performance evaluation. It is part of career development and consists of regular review and documentation of the job performance of an employee.


Many managers consider performance appraisals one of their most disliked tasks. This is not surprising if it is the only time they have a full, forthright discussion with the individual employee. Historically, performance appraisals tend to be conducted on an annual basis. However, there is an increasing number of companies moving towards shorter cycles, such as half-yearly or quarterly.


The performance appraisal develops employees and help them understand two key areas required to perform their job well:

  1. What are the manager’s expectations of them
  2. How can they meet the manager’s expectations


Performance appraisals, when poorly conducted, can become a waste of corporate resources. On the other hand, when it is effectively carried out, the procedure can refocus the employee’s attention on the mission, strategy, vision and values of the organisation.


The performance appraisal typically has an impact on the employee’s compensation, performance improvement, promotion and termination.


The purpose of performance appraisal

The performance appraisal can be used to improve these areas:



  • Enhance employee’s focus by promoting trust
  • Reduce staff turnover
  • Identify employees’ strengths and weaknesses
  • Provide data for manpower and succession planning
  • Improve employee-manager communication



  • Improve team performance
  • Assess employee's development or promotion potential
  • Set objectives for performance
  • Discover employees’ ambitions
  • Reinforce recognition and support for employee’s work to date
  • Obtain information for pay review



  • Recognise employee's achievements
  • Review and improve performance
  • Determine training needs
  • Chart possible career progression
  • Improve morale and increase confidence


Preparing for performance appraisal

Preparation is crucial before the performance appraisal interview. It is essential that both you and your employee have sufficient time, ideally more than two working weeks, to fully consider your own agendas.


Many companies require the employee to fill up a performance appraisal form prior to the performance appraisal interview. You will need to set aside time to read last year’s appraisal and think about the one on hand. Other useful documentation includes:

  • Job description
  • Performance standards
  • Notes from last year’s performance appraisal interview
  • Employee records
  • Information on past training employee have attended 
  • Examples to support feedback
  • Employee’s agenda


If you are the employee’s main manager, consider who else has relevant information about their work. This is sometimes called a 360-degree feedback because you will be obtaining feedback from coworkers. You will need to speak to them before the interview. This may be time-consuming but it can be very useful for collecting facts and evidence regarding the employee’s work behaviour.


During your preparation, you need to decide how you will be evaluating your employee’s performance. This includes exactly what you will be looking for and how you will be assessing the employee's performance. Jotting down your main points of feedback before the performance appraisal interview can be very helpful.



The performance appraisal interview

It is important for you create a balanced interview. Besides recognising and praising the employee's strengths, be clear about the areas for improvement. When sharing feedback, speak directly and do not mince your words. The employee should leave feeling positively challenged and that there has been an honest exchange of views and information.


For average and above-average employees, you can focus the majority of the discussion on how he or she can continue to grow in the current role. For underperforming employees, your focus can be on the areas that need improvement.


Start with the purpose

A good way to begin the performance appraisal interview is to remind the employee the purpose of the appraisal. They may be feeling apprehensive and uncertain, since this interview may affect their promotion and pay prospects. Help them overcome their anxieties by creating a welcoming and encouraging atmosphere. Emphasise that this is an opportunity for constructive dialogue and discussion. To build trust and confidence, begin with an easy question to get them warmed up. Do not launch the session with a challenging question as this may cause the employee to get defensive.


After you have set out the purpose of the appraisal interview, get the employee’s buy-in on how the appraisal will ultimately be beneficial to them. Let them know that you plan to make brief notes and suggest that they take notes too.


Recap the agenda

You will both have topics that you want to cover and there may be overlaps. Before giving feedback, outline the order of the topics you want to take and check if your employee agrees with it. Be prepared to change your agenda to accommodate your employee. Even if you regard their issues as less important, you must tackle some of them. If you ignore their concerns, they will feel that you are uninterested in their problems.


Keep an open mind and if discussion goes out of sequence for a good reason, go with the flow. Make sure that you give your employee ample opportunity to convey their thoughts and ideas. Remember not to dominate the discussion. Ideally, you should aim to spend about 80% of the appraisal time listening and only 20% of the time speaking.


Key areas to cover include:

  • Last year’s appraisal and targets
  • Problems over the performance appraisal period
  • Successes over the performance appraisal period
  • Areas for improvements/training/development
  • Performance standards in the past/future
  • Areas of job (dis)satisfaction
  • Future targets


Giving feedback effectively

The most effective way to give and receive feedback is in an atmosphere of safety and trust. Bear in mind that the appraisal is a dialogue and goes both ways. When you are giving feedback, you can follow the following tips.


1. Be specific

Whether your feedback is positive or negative, it is best to refer to specific incidents you have observed or been told about. This will encourage development and self-awareness in your employee. For example, avoid saying “that was great” or “you were lousy”. Give clear examples, such as:


“I’d like to discuss your role on the [name of project]. I am aware that the deliverables you pledged has been delayed 3 times and caused the project completion date to be postponed.”


2. Supplement feedback with the effect the behaviour has on others 

Before offering a criticism, think about what part of their behaviour you want to comment on. You either want someone to change his/her behaviour for the better or continue an effective behaviour. Sharing with the employee the effect his/her behaviour has had on others helps the employee understand the reasons for your feedback.


For example, instead of saying “I don’t want you to delay the project any longer”, you can add how others might be affected by the delay by saying “other team members depend on your input to proceed with their work. When your deliverables are delayed, they become anxious.”


Be clear when you are reinforcing the positives: “I was pleased to see you listening to her, letting her finish what she was saying and then summarising your agreed plan of action. She look pleased.”


3. Express your feelings

It is important to let your employee know how you feel about the situation. This lets the employees know the strength of your criticism or praise. Use expressions such as:


“I was pleased…”

“I’m delighted that…”

“I feel increasingly annoyed when…”

“I feel extremely uncomfortable that…”


Be prepared to cite observations for each point you raise. Avoid the horn and halo effect where you only touch on recent positive and negative events. Instead, you are responsible for documenting all events that occurred within the entire period the performance appraisal covers. Remember to focus on job performance and related factors, not personality.


4. Discuss each other’s ideas

Your aim is to reach an agreement that is acceptable to both of you. This will be more successful than imposing your own ideas without discussion. Very often, if you ask for your employee’s ideas or suggestions for change, they will have plenty to say. After all, they know these matters well as they are dealing with it throughout the year. If you don’t elicit their ideas, you will lose their commitment.


Good questioning techniques are essential to discover your employee’s opinions. By asking the right questions, you encourage the employee to bring the issues into the open, rather than have it hinder performance. When you understand how your employees feel, you can use this knowledge to help them improve their performance.


5. Using open questions

As much as possible, use open-ended questions to encourage your employee to provide an expansive answer. Avoid closed-ended questions which typically elicit a “Yes” or “No” response.


Examples of open-ended questions are: 

  • What do you expect to be the most challenging part of your work for this quarter?
  • What support can the department provide to help you reach your goals?
  • What do you hope to achieve at our company this year?
  • How can I be a better manager for you?


6. Keep an open mind

During the performance appraisal interview, you will be asking for comments from your employee and seeking their ideas for change. It is possible that some of these may include criticism directed at you. Listen to what your employee has to say and consider it carefully before responding. This could be a chance for you to learn too.


When receiving criticism, practise the following dos and don’ts.



  • Deny the criticism
  • Become defensive 
  • Argue
  • Sulk
  • Justify yourself
  • Interrupt
  • React too quickly



  • Listen carefully
  • Try to understand and ask for clarification
  • Decide whether the comment is valid
  • Consider what can be done, if the comment is true
  • Consider how this impression came about, if the comment is not true or is partly true
  • Consider what you have learned


7. Work towards an action plan

Aim to have clear agreements on the objectives and actions for the following year. The action plan should include review dates and success criteria. You will also want to confirm any development opportunities and their implementation.


You can end the performance appraisal interview by summarising:

  • Any jointly agreed issues
  • Agreed changes
  • Development plans
  • Areas of satisfaction


You can indicate what you will be including in the written performance appraisal document, and when you will be handing it to the employee for his or her comments and signature.


Whenever possible, aim to end the performance appraisal interview on a positive note. Remind the employee about the areas you are pleased with and emphasise that you have reached joint agreements in the areas for improvement. This is vital for their commitment.


8. Have a follow-up plan

Most companies require a formal record of the performance appraisal interview. Complete it as soon as you can. Immediately after the interview, take time to expand the brief notes you have taken during the interview.


Put into operation any agreements you have reached with your employee. These could include organising training, taking up coaching opportunities or arranging counselling. As soon as this process is completed, you can start collecting information for next year’s appraisal.


Most people want to know how they are getting on at work. Even though you are talking to them throughout the year, the performance appraisal interview offers the chance to consider past and future projects in detail. The added bonus is that the employees have your complete and uninterrupted attention, and vice versa. The appraisal is also a great time to reinforce the praise you have been giving your employee over the year. Encouragement and praise breed confidence, which enables them to take risk and expand their capacity at work. The more you give genuine praise, the better your team members will perform.

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