How can you review employee performance and ensure fair appraisals and performance pay?

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Appraisals are used across organizations to evaluate employee job performance and become a platform to decide pay increments and promotions.Appraisals are often seen as an unnecessary management tool but, on the contrary, they are extremely useful to have in place. Appraisals are used to review employee performance over a specific period.

Typically, appraisals are conducted once a year, but it could be conducted once every six months as well to make sure that your teams are all pulling in the same direction. A sub-set of appraisals like monthly or bi-monthly reviews are also useful to ensure that everything is on track. That way you can make small tweaks and adjustments in line with organization objectives and avoid unwanted surprises.

Whilst there’s no law saying you must appraise your staff, it is an opportunity for you to motivate and develop your employees. Performance appraisal is one of the most critical processes to review employee performance because his/her compensation is tightly tied to the performance review. For this process to run smoothly, managers or HR Leaders should prepare some checklists for measuring employee performance.

5 tips for managers to review employee performance through fair performance appraisals

If the managers follow an objective performance review methodology backed by quantifiable information on the employee’s performance, fairness in the assessment is possible.

In the recent research, I found some highlighted five pointers for managers to follow to ensure fair performance evaluation. Let’s have a look what are the tips for HR Leaders and Managers:

1) Build performance metrics that quantify efforts: During performance assessment one of the typical challenges that make employees skeptical about their efforts being acknowledged is the lack of defined metrics which quantifies the employee’s efforts.

Having a strong performance evaluation metric also removes scope of the manager’s bias with the possibility of giving an undue advantage to favored employees.

So, managers should work with the HR team to build a robust performance management metric which leaves no scope for manipulation – neither from the employee’s end nor from the manager’s end -as everything would then be documented and quantified.

2) Trust but verify: At times, the numbers mentioned in the self-assessment notes of employees are inflated or have KPIs and goals which are different from what were agreed at the beginning of the appraisal period.

The manager needs to keep a record of the right KPIs and targets of all employees. Preferably, she/he should publish them well in advance so there is just one version of the truth. Yet, there is a need to double-check the self-assessment notes, unless the company’s performance management system is well-integrated with performance dashboards.

3) Empathize with the employees: For many employees, writing a self appraisal is a process that makes them feel they are going through their final examination as students. So, it’s a tremendous stress bubbling in the minds of employees.

While some feel defensive, others try to put their best foot forward. While some would become close-minded to suggestions, others might just feel scared and apprehensive. In such situations, a manager needs to empathize with the employees and make them feel comfortable with the process so that best results are brought out of the performance appraisal processes.

4) Prepare to give honest feedback: The manager has to understand the context in which the employee, the team, and the company performed and also the external factors. Based on the overall context, one has to evaluate the performance and show the path to the employee for the next period.

So, it’s an opportunity for the manager to offer a feedback and direct the person to the next step. Basically, the manager must know how to leverage the opportunity and convert the inevitable stress during the appraisal process into a positive and energizing conversation to boost the employee’s performance in future. Hence, it calls for a lot of preparation for the manager.

5) Build a fair mental framework: It is quite natural that managers would have their own personal opinions and perception about each employee. But while preparing to host self-assessment discussions, managers should consciously work towards eliminating such biases and evaluate the employee with a purely objective perspective.

Here are things that you can do, as you prepare to conduct employee appraisals.

1.Prepare for the staff appraisal meeting:

Prepare for the meeting by reviewing any notes you may have on file for the employee that you are meeting, since their last appraisal. Refresh your memory of what happened during the review period, as this will help you to make a more rounded decision over the long term – rather than their performance just prior to their appraisal. If the staff member has worked closely with any other managers or customers, it may be worth your while asking their opinion on the employee’s performance.

2. Make the appraisal a two-way affair:

Listen to the employee. Encourage reactions and suggestions – allow him or her to say what they need to say. If there are areas that need improvement, encourage the employee to come up with potential solutions. Give the appraiser an opportunity to talk and take the time to fully listen to them.

3. Identify training/development required:

Suggest training opportunities to help them get to where you and the employee want to be. Ask the employee if there is any training that they are aware of which will help them in their role and, if it seems credible and viable, have a look at it. There are some things that the employee is best placed to inform you about so you should always give plenty of time to let them have their say.

4. Discuss future action:

If the employee has a satisfactory rating then set objectives for the next period. You can either discuss the objectives of the appraisal meeting or schedule a follow-up meeting.

5. Pay hike Discussion:

Although an appraisal is a right forum to discuss requests of this sort, you shouldn’t feel under pressure to agree to anything on the spot. For any employer, it is important to establish a communication channel to discuss this topic and also make the employee feel that he/she is being treated fairly. The employees expect to know the rationale behind the value of the increment.

Last, but not the least, it is important to review employee performance and appraisal is certainly one of the best ways to do it. Some organizations find this too tedious and sometimes daunting. Operating under the stress of tight deadlines and the need to always stay objective focused can be a problem. However, from the employee’s perspective – the appraisal document and meeting can be the most important factors in their career development. It deserves your time and attention.

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Dr. Soniya Yadwadkar

Dr. Soniya Yadwadkar

Dr. Soniya holds a Doctorate in Management Sciences and has over 22 years of professional experience in leading and implementing Strategic Business and People Management Initiatives in diverse industry segments. She is proficient in conceptualizing and implementing corporate level Strategic Business Management and HR OD initiatives such as Strategic planning, Balanced Score Card, Competency based HR Processes and Systems, Organizational Restructuring and Cultural Transformation, Post Merger HR Integration, Organization Development and Change Management.
Views expressed are of the author.
Dr. Soniya Yadwadkar

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