DRG Memo

How To Conduct A Performance Appraisal

by Bob Losyk
04/01/2002 Public Management
Page 8-11
Copyright (c) 2002 ProQuest Information and Learning. All rights reserved. Copyright International City Management Association Apr 2002

It's that dreaded time again: time to do employee appraisals and reviews. You just know it's going to eat up all of your time and energy. You feel stressed out just thinking about it, don't you?

Well, you certainly aren't alone. Judging from the city and county managers I spoke with at the Florida City and County Management Association meeting last year, managers throughout the country echo these feelings.

But managers can change the course and outcome of the face-to-face performance appraisal interview. By following some simple guidelines, they can make appraisal interviews positive and productive while achieving the desired results for themselves and their employees.

Understanding Bias

The biggest challenge that impedes an effective performance review is the biases we all have. Unfortunately, many of us have biases of which we are totally unaware. We go into an appraisal review with subjective feelings and opinions. Although this is normal human behavior, it can be costly to you and to the employee.

A bias can be negative as well as positive. A positive bias can cause you to rate the employee higher; this is known as the "halo effect. For example, an employee may have done exceptional work in the past or saved the day on a particular project last year. That impression of good work may carry forward to a much later period. A great job at the beginning of a review period might mask mediocre performance for the rest of that period.

Sometimes, you might give a higher rating to someone who always agrees with you or doesn't complain or "rock the boat." Another bias could be your "blind spot." Employees can have the same deficiencies as you have or lack particular skills that you also lack. Because they mirror you, you just don't see it because we often don't see our own flaws. Still another prejudice might occur when people resemble you in the way they look, speak, dress, or act. They also may come from the same state, city, or school as you did.

You also might have a negative bias known as the "horn effect" and rate the employee lower. For instance, an employee may have made a mistake in some area late in the review period. He or she is automatically downgraded for the entire review period, although the employee's performance might have been exceptional up until that unfortunate incident.

Managers may downgrade people who disagree with them often, brag, are quiet, or don't socialize with other employees in the department and are cast as loners. If a particular department that reports to you is weak overall, you may downgrade an exceptional performer within that department. You also could have a bias against someone because he or she keeps company with someone you don't like or get along with.
Finally, you may downgrade someone because he or she performs a task or skill in a different way than you would, although still getting effective results. This prejudice can be seen with people who come from different countries and have been educated in different cultures.

If you look at the other reasons why performance appraisals often fail, you'll see that most reasons are related either to not understanding what "performance" is, not knowing how to rate performance, or not knowing how to discuss performance during the face-to-face interview.

How to Rate Performance

In order to rate performance, a manager must define specifically the individual behaviors and skills needed on the job. Next, you must be sure that employees have these skills when hired, or they must be trained. Finally, you need to observe people's performance levels and collect data about them before you can rate or place a value on them.

Let's assume you have observed the work behaviors, or the results of those behaviors. The challenge is to use a rating system that is fair, easy to use, and clearly understood by all. Managers should not compare employees with each other but with a set of standards for each job. Trainees should be judged on a standard for trainees, not on the same standard as seasoned employees.

Unfortunately, many appraisal forms are so complicated, with so many ridiculous categories, that managers get totally stressed out trying to decide which box to check off. The employee often reads the review in anger or disgust, totally disagreeing with at least some part of the review.

If you think about performance logically, people are either doing their jobs in an unsatisfactory manner, a satisfactory manner, or an exceptional manner. These are the only three rating categories you really need. I've seen performance review forms with "poor," "fair," "adequate," "good," "very good," "superior," and "excellent" as categories. No wonder people get frustrated. What is the difference between "fair" and "adequate" or between "superior" and "excellent"?

One other thing to consider is whether you really need to rank all your people with an overall rating that compares them with each other? Remember, you are trying to improve a person's performance, not give each person a number. Ranking systems are among the biggest de-motivators and destroy morale.

The Appraisal Interview

No interview can produce positive results without adequate preparation and a commitment to a follow-up effort. It's best to look at the interview as having three distinct stages: (1) preparation (both for manager and employee), (2) conduct of the interview, and (3) performance of follow-up procedures.

Manager Preparation

You must know exactly what your employee's job is and how he or she is performing it. You should have observed performance many times during the appraisal period. If your employee has performed up to standard, your job has been one of reward and recognition. If your employee has not performed to standard, then you should have been communicating, coaching, and training to help the employee meet the standard. Either way, detailed records should have been kept to make your job easier.

Your task now is to review the relevant job requirements, the expected standards of behavior, the objectives set for the appraisal period, the objectives met, and the documentation you have kept during and after previous coaching sessions. You must look at the big picture to see how the employee has performed throughout the appraisal period.

From this big picture, a comprehensive plan for conducting the appraisal interview should emerge. Make an outline of the goals you want to accomplish. Determine the strengths and weaknesses to be addressed. Be sure to make unbiased and specific observations for each point. Decide in advance which areas of poor performance must be discussed and which areas can be postponed for coaching or training sessions.
Be prepared to discuss an action plan that the employee can successfully implement for each area of poor performance. This plan should include specific improvements your employee must make, with suggestions and guidelines on how to improve.

Employee Preparation

Most employees (and unfortunately some managers) don't realize that successful appraisal interviews also require employee preparation. It is the manager's job to explain to employees how to prepare for a face-to-face interview. This can be accomplished by giving the employee a general list of areas to be discussed, like a meeting agenda.

In addition, asking employees to answer some open-ended questions before the interview can really stimulate discussion and give management great feedback on employees' attitudes about their job performance and about the organization in general.

Conducting the Discussion

Start by creating the proper climate for the appraisal interview. Make sure that you hold the interview in a private, neutral location that has a friendly and informal atmosphere. If you are to achieve your objectives, the setting must be a nonthreatening one.

Block out enough time on your schedule for however long you expect the interview to take. A thorough interview can easily take more than an hour. Allow no interruptions. Have all your supporting materials accessible, so you don't have to stop and find them. Make the message to the employee clear: your performance appraisal interview is important; we care about you and your performance.

Start the interview by describing the employee's strengths. Of course, this should not be the first or only time when the employee hears positive feedback. If you have been doing your job since the last appraisal interview, you have been praising, recognizing, and rewarding the employee regularly for a job well done or an extra effort made.

You should also have been providing feedback on performance deficiencies, doing some coaching, and helping employees to correct problem areas. There shouldn't be too many surprises for employees during their interviews if you have been properly communicating with them since their last appraisals.

Many managers feel a fear of delivering bad news to workers. What you are really delivering, however, is negative performance feedback. This is merely giving information on the variance between behavioral standards and goals and actual employee performance. Isn't this part of management's job?
To ease the pain of the interview and to make it less stressful and more productive, after starting by discussing an employee's strong points, then alternate and blend these points with areas that need improvement. Give specific examples of observations you have made.

Make it a two-way discussion, with mutual problem solving and goal setting. This helps employees feel secure and shows that you are interested in helping them. Show them repeatedly during the course of the interview that you are committed to helping them improve their performance.

Once the causes and effects of nonperformance have been discussed, your next step is to set up a joint action plan. In other words, get the employee to make a commitment. What does he or she intend to do about the problem? Work out the plan and how you intend to help the employee succeed in making positive changes. Be specific on how much improvement should be made and by which target dates. Also, outline the steps necessary to build on your employee's strengths.

Follow-Up Stage

While memories of the interview are fresh in your mind, record all the points that were discussed, the joint plans made, and the goals set. Give a copy of this record to the employee. Again, this step shows that you are seriously committed to improving performance. It also will allow the employee to see and remember exactly what was discussed. If there have been any misconceptions, allow the employee to discuss them with you immediately.

Also, evaluate how you performed during the face-to-face interview (see Figure 3 for sample questions). Yes, this is a critical part of the process. It will help you to become a better interviewer and enable you to be a more effective communicator, coach, and motivator.

Resolve to follow up frequently, in a positive and productive manner. Observe the employee at the tasks or behaviors that were deemed deficient. If there is improvement, your job again is to praise the employee. Any kind of recognition you give, especially in front of peers, is a powerful motivator. If there is no improvement, your job, again, is to find out why, then to communicate with, train, and coach the employee.

Finally, work on keeping communications open until the next appraisal interview. If you are doing a good job as a manager, and if you are getting your employees to perform well, then you will not be feeling all this tension and stress the next time you need to evaluate someone. Your employees won't be feeling it either. Instead, you can look forward to effective, productive face-toface meetings that will give you and your employees a chance to achieve greater job satisfaction, improved morale, and higher productivity.

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Bob Losyk is a certified speaking professional, consultant, trainer, and author of the book Managing a Changing Workforce: Achieving Outstanding Service with Today's Employees, www.boblosyk.com.