“Julia, we are a small company, why should I waste time doing employee appraisals – that’s for big companies!”
Why Have Performance Appraisals?
Over the last few years, the use of “360 Degree Feedback” has grown in popularity. 360 Degree Feedback is a system or process you develop in which the employees received feedback from those who work around them. This can be managers, peers, direct employees, or employees from other departments in which they interact with regularly. However, before we discuss the pros and cons of 360 Degree Feedback it is important to gain a general familiarity with performance appraisals. In particular, what are the advantages of performance appraisals?
Performance Appraisals offer several advantages to the individual, team, and to the company.
Individual
At an individual level, performance appraisals offer a number of advantages. These include:
- Recognition of past effort
- Developmental/training requirements can be uncovered
Research has consistently demonstrated that these items are extremely important for an individual. Without recognition for past efforts it can be difficult to consistently motivate an individual to engage in future efforts, or willingly accept developmental activities.
Team
In addition to the benefits achieved at an individual level, a number of team benefits come straight to mind. These include:
- Alignment of effort with objectives
- Motivation of team members
The effectiveness of any team is clearly aligned to the team’s set of objectives. Without opportunity for feedback in a trusting and transparent setting, the team will not know where they collectively are in relation to those objectives.
Organization
The subsequent advantages to the company become evident:
- Development of staff
- Achievement of key objectives
- Best and focused utilization of human resources
Overall Benefits of Appraisals
- Increased employee performance
- Greater control of work
- Improved motivation and commitment
- Increased information flow
- Better relationships within & across the company
360 Degree Feedback is a continuous process of improvement and must be always perceived as being so.
Roles within Performance Appraisals
The simplest form of performance appraisals involves two individuals – the manager and the employee.
Manager’s Role in Performance Management
- Set Objectives with Employees
- Manage Rewards and Ensure Fair Compensation for an observed level of Job Performance
- Offer Accurate, Timely, Regular & Specific Feedback
Advantages to Managers
Through Performance Appraisals, Managers can:
- Translate business goals into individual job objectives and standards
- Monitor performance against solid standards and offer feedback
- Communicate and seek buy-in / agreement on objectives
- Coach employees on how to achieve their performance objectives
- Identify employees strengths and weaknesses
- Generate and agree upon development plans to best serve the company’s and the individual’s needs
One of the most important advantages to performance appraisals is the employee’s role in performance management! When employees are actively involved in their own development and set objectives with their manager, there is a natural tendency to take ownership in their own performance.
Advantages to Employees
Through Performance Appraisals, employees can:
- Openly discuss performance with managers
- Be provided with an opportunity to develop skills
- Reinforce and sustain current good performance
- Improve existing performance
- Determine career progression goals
- Identify training needs
- Link rewards to performance
Eight Appraisal Techniques
Below is a list of the main performance appraisal techniques. Most companies use these forms of performance appraisals. Whatever you choose to include as part of your 360 Degree Feedback will vary depending on the type and history of your company.
| Ranking | Strengths | Weaknesses |
| Appraiser ranks employees from the worst to the best based on specific characteristics or on overall job performance |
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| Paired Comparisons | ||
| Appraiser ranks employees two at a time and decisions on which is superior are included in the final ranking order for the whole company |
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| Critical Incident | ||
| Appraiser observes incidents of good and bad performance and uses this information for judging and leading the performance appraisal |
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| Free-Form/Narrative | ||
| General free-written evaluation by the appraiser |
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| Self-Assessment | ||
| Employee evaluates themselves based on a particular template that has been supplied by the company |
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| Assessment Center | ||
| Employee receives a series of assessments supplied, performed and evaluated by specialized external assessors |
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| Performance | ||
| Appraiser evaluates the degree to which the Employee has achieved specific objectives |
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| Rating | ||
| Appraiser specifies on a scale to what degree relevant characteristics are possessed by the Employee. |
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Key Implementation Areas
Before we begin to briefly examine an effective 360 Degree Feedback Process, it is important that we understand implementation areas. These are:
360 Degree & Employee Development
Within the area of employee development, 360 Degree Feedback will:
- Focus on development of skills and competencies to meet organizational objectives
- Identify Training & Development Needs
- Identify Areas for Improvement
- Develop Action Plans
- Assist Career Development Opportunities
360 Degree & Performance Appraisals
Within the area of performance appraisals, 360 Degree Feedback will:
- Set Performance Objectives
- Review Past Performance
- Improve Current Performance
- Assist Career Development & Promotion Opportunities
- Assess Salary/Position Levels
Stay tuned for part 2 – we’ll talk about “An Effective 360 Degree Feedback Process” and the top 10 Reasons 360 Degree Programs Fail.
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