Conducting Performance Appraisals

Last Updated Oct 10, 2007 2:35 PM EDT

As you become responsible for managing other people, you will likely need to conduct performance appraisals. These face-to-face discussions—ideally undertaken at least every 12 months—provide an opportunity for a manager and employee to review the employee's work and to improve motivation and performance. Unfortunately, many managers dislike conducting appraisals and, even worse, a lot of employees fail to see the value in them. In reality, an appraisal can be a great opportunity for understanding and improvement—if it's done right.

What You Need to KnowWhy conduct performance appraisals?

Performance appraisals give you an opportunity to review your employees' past performance, plan their future work and role within the organization, and agree on specific goals. A face-to-face appraisal can:

  • permit on-the-spot coaching, in which you can identify development needs and set up development activity;
  • elicit useful feedback from the employee, which can reinforce your relationship;
  • help the employee's career progression and increase his or her motivation;
  • provide an opportunity to delegate more responsibility to the employee.

If an employee must be terminated, a record of performance appraisals provides a foundation for such a decision and may be helpful if the employee takes legal action.

The good appraisal presupposes that even the best performance can be improved.

Is there a way to take the anxiety out of a face-to-face appraisal?

You and your employee can be more comfortable during the appraisal when you:

  • allow enough time. Few appraisals will be accomplished properly in less than an hour. Some may last two or three hours or more and yet be time well spent.
  • create a suitable environment. Appraisals should be held somewhere private, comfortable, perhaps less formal than across a desk, yet suitably business-like.
  • put the individual at ease. Remember that, even with good communication beforehand, appraisals may be viewed as somewhat traumatic.
  • allow no disturbances. Pausing to take even one telephone call will suggest to the employee that he or she is low priority.
What to DoPay Attention Throughout the Year

Successful appraisal is the culmination of a year's worth of thinking on the part of both manager and employee.

Not only for the sake of the annual appraisal but also as good management practice, managers should spend enough time with the employee over the course of the year to fairly evaluate performance. You should maintain good records on any performance matters, so you do not have to rely on memory for the actual appraisal.

Make sure employees know that they will be appraised annually and encourage them to keep their own notes and records so they will be prepared to discuss their performance as well as their aspirations.

Relevant background information needs checking: for example, the employee's job description (which may need amendment after the appraisal), specific past objectives, possible changes to the job, its responsibilities or circumstances, and the records of any previous appraisals.

Prepare Carefully for the Appraisal

Notify the employee in writing that the annual appraisal is coming up. Set a mutually convenient day and time. Include in the written notification the purpose of the appraisal and any specific topics you wish to discuss. If you are going to use any forms or documents in the appraisal, give copies to the employee in advance.

Set aside time to prepare the appraisal. Study the person's file, making sure that you have all the information you need about what was supposed to happen during the year and what actually did happen.

Draft a provisional assessment of the employee's performance—brief notes are adequate. Then review those initial thoughts to check your rationale on each point. You may wish to talk to other people about the employee, although in the strictest confidentiality. When you think the employee needs to improve in a particular area, prepare some constructive suggestions to have ready, remembering that you will want the employee's point of view before you actually make the suggestion. Similarly, have suggestions ready for new tasks, projects, or other avenues for the employee's professional development.

Decide whether you will discuss pay increases at the same meeting as the appraisal. Many managers believe pay review should be discussed at a separate occasion.

Prepare an agenda for the meeting, using your own notes or a standard appraisal form.

Handle the Appraisal Effectively

During the appraisal meeting, you should direct the proceedings according to your prepared agenda without riding roughshod over the employee. As you make your points about the employee's performance, encourage the employee to respond, asking open-ended questions and listening carefully. The employee should do most of the talking, and it's up to you to make that happen.

In your comments, stick to the employee's performance and his or her strengths and weaknesses on the job. Don't indulge in amateur psychology or personality evaluation.

Taking into account everything the employee tells you about his or her performance and work aspirations, set out action plans for performance improvement, additional responsibilities, training, or other changes. If an additional meeting would be helpful, set it up.

Conclude on a positive note. Always thank the person for the role he or she has played and for the past year's work. Follow up appraisals promptly, sending the employee a summary of the appraisal meeting and recapping the action plan.

What to AvoidYou Don't Value Appraisals as You Should

Appraisals achieve the most when they are placed in a larger context and linked to ongoing operations. An effective appraisal should motivate the employee to improve and encourage him or her to take advantage of mentoring and other informal processes as well as formal training opportunities. A good appraisal will strengthen the manager-employee relationship throughout the year.

You Dwell Too Much on the Past

Past performance should account for no more than 60 percent of the appraisal discussion. The rest of the time should be devoted to future activities, priorities, development needs, and objectives.

You're Too Critical

Successful appraisals are dynamic, positive discussions, not a witch-hunt or a chance to heap blame and ignominy on someone. (If you do need to tackle a problem, do it when the problem arises, and don't just store it up for the appraisal!)

You Communicate Poorly

You must be clear, honest, and open in your comments. The more you hedge, the more chance there is that misunderstandings will creep in.

You Fail to Follow Up after the Meeting

Soon after the appraisal, you must write your report of the outcome and send it to the employee, with an invitation for further discussion, if needed. Maintain a copy for your company files.

Where to Learn MoreBooks:

Falcone, Paul, and Randi Toler Sachs. Productive Performance Appraisals. 2nd ed. AMACOM, 2007.

McKirchy, Karen. Powerful Performance Appraisals. Career Press, 1998.

Shepard, Glenn. How to Make Performance Evaluations Really Work. Wiley, 2005.

Web Sites:

U.S. Coast Guard. "Conducting Good Performance Appraisal Meetings":