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How to Overcome Performance Appraisal Problems

Do you or your employees often get upset after performance appraisals? Have you received any complaints about your performance appraisal ratings? Do your employees think rewards or promotions are given out in an unfair and unjust manner? If you answered yes to any of these questions, then it may be a sign that your performance appraisal system needs a serious makeover. Your first knee-jerk reaction might be to jump on the bandwagon and scrap your performance appraisals all together. However, without extensive preparation, training, and a strategy for replacement, eliminating your formal appraisal system may do more harm than good.

Performance Management is the process of assessing the performance of each individual employee. It includes activities, such as goal setting, performance discussions, career development, and coaching conversations. Despite the increase in popularity of abandoning performance appraisals in the media, the clear majority continue to include annual performance appraisals in their organizations’ performance management. Performance appraisals can reduce ambiguity, and increase transparency, providing insight to employees on how they stand within the organization. These appraisals can also be used for a variety of important decisions, including but not limited to: employee development, rewards, promotion, and layoffs.

Having an effective performance appraisal system is critical for not only preventing lawsuits due to unfair layoffs, but also for maintaining employee job satisfaction, engagement, and organizational commitment. There are numerous components of what goes into an effective appraisal system, so it is easy to overlook details that may be contributing to unconscious bias, prejudicial ratings, and ultimately unfair decision outcomes. Read on to learn more about the most prevalent flaws among employee appraisals and ways to address them.

Not Focusing on the Right Things

Performance appraisals should focus only on the important tasks and behaviors necessary for the job. Competency-based performance appraisals are one way to ensure that you are using an objective measure that focuses on the key behaviors identified as important to the job, and to your organization. If your organization already utilizes a competency model, you can include the behaviors from these competencies and incorporate them into your evaluation forms. To learn more about creating successful competency models, read our blog post: Why Competency Models Fail.

Not Accurately Measuring Behavior

Spending time fine-tuning the technical aspects of your evaluation form is a necessary way to improve your performance appraisal process and is an aspect that is often over looked. You want to make sure that all managers interpret the rating scales accurately. It is necessary to provide clarity as to what each of the numbers represent on your scale. A valid and reliable scale should always have a key explaining what the numbers represent in regards to “High” or “Low” scores. Another great option to add some finesse to your appraisal form is to add a behaviorally anchored rating scale (BARS). This way managers are able to distinguish which behaviors constitute a specific rating. For example, which behaviors are required for a score of 3 versus a 5. Below is a sample of a BARS used to evaluate the customer service competency on an appraisal form.

* Kell, Harrison & Martin-Raugh, Michelle & M. Carney, Lauren & A. Inglese, Patricia & Chen, Lei & Feng, Gary. (2017). Exploring Methods for Developing Behaviorally Anchored Rating Scales for Evaluating Structured Interview Performance: Exploring Methods for Developing BARS. ETS Research Report Series.

Not Seeing the Whole Picture

Often organizations may get caught up in doing the same old thing. This can happen with performance appraisals, as well. If you continue getting negative feedback about your appraisal process, it may be a sign that it is time to switch up the process by having different sources of raters.

Rather than having one supervisor solely responsible for the evaluation, it can be helpful to gather evaluations from multiple sources. Including peers, direct reports, and self-reports in the evaluation process is a great way for supervisors to evaluate consistency across raters and get a better picture of how the employee is truly performing. Sometimes, it is not always practical or reasonable to formally include all of these sources in the appraisal process. Nonetheless, at the very minimum, supervisors should at least seek feedback from multiple sources throughout the evaluation process.

When eliciting this feedback, it is important to be mindful of the possible biases that can occur with self-report and peer evaluations. For example, peer evaluations can be biased depending on how well peers get along. Additionally, self-report evaluations have the potential to be subject to inflation. Therefore, it is critical to become aware of these biases in order to be able to objectively gauge responses across raters and evaluate more effectively.  

What can be done to fix these issues?

You are already one step ahead of the rest by reading this article to learn more about common performance appraisal mistakes. You can click here for a Performance Appraisal Factsheet for even more information about performance appraisals. It is never too late to integrate changes to your employee appraisal process. Shifting the focus of your performance appraisals towards competency-based behaviors and reducing the ways in which raters evaluate others subjectively, is essential in order to create an appraisal system that is objective, fair, and valid.

Often times, we are unaware of our unconscious biases that can arise during evaluations, so it is important to make the unconscious, conscious. Are you interested in learning more about the role of bias in rating errors? Our next mini-series will be focused on implicit bias in the workplace. Keep an eye out for our upcoming article: Are You Rating People Unfairly? The Role of Rater Bias in Evaluation.

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