How to Be Good at Performance Appraisals: Simple, Effective, Done Right

Introduction

I received my very first performance appraisal six months after I started to work at General Electric. It was almost brutally frank (and spot-on accurate) in pointing out that I wasn’t doing a very good job. It provided the young kid I was then with the wake-up call I needed, telling me dramatically that my school days were over and that tough, rigorous performance expectations were now in place. My boss’s straight-between-the-eyes candid feedback—both on the form and in his words—was the jolt I needed to get me to move out of the world of school and into the world of work.

Later I became an HR manager with United Airlines and then with Frito-Lay, where I continued to receive performance appraisals every year from managers who took the process seriously and put a lot of effort into making those appraisals comprehensive and valuable.

Finally, as a consultant specializing exclusively in performance management over the past thirty years, I have helped hundreds of companies create performance appraisal systems that work. I have taught thousands of managers how to successfully do the demanding job of evaluating an individual’s performance and then discussing that evaluation with that person.

In all this time, the same questions keep coming up—questions like these:

How do I do a good job of setting goals? How many goals should I set?

How do I evaluate a person’s behaviors, and how much emphasis should I place on the behavioral part of the person’s performance versus the results that she achieves?

How do I identify a subordinate’s development needs?

How do I determine what the right performance appraisal rating is, and how do I convince the person being evaluated that my rating is correct?

How do I deliver bad news without killing communication or motivation?

Who This Book Is For

If you supervise people, this book is for you.

Whether or not your company (or agency or firm or organization or corporation—I’ll use those terms interchangeably) has a formal performance appraisal system, if you have people who report to you, you’re a manager (or supervisor or foreman or dean or project head or team leader—whatever the exact term for your job might be). As the manager, you’ve got to tell the people who report to you what to do and explain how you want it done. You’ve got to let them know how well they’re doing—where they excel, where they’re delivering exactly what you expect, and where they need to improve.

If you’re a manager, you need to help your people set goals. You need to help them understand the difference between good goals and bad goals. And you need to figure out how well they’ve done in achieving those goals.

You need to tell your team how you want them to do the job. By do the job, I’m talking not so much in terms of technical skills and step-by-step instructions, since some of your people probably know more about the technical aspects of their jobs than you do. Rather, I mean that you need to explain how you expect them to act toward others and how you want them to conduct themselves while they’re on the company clock.

Who am I to tell them how to behave? you might ask. You’re the boss, I’ll answer, and people want bosses who make their expectations clear, in terms of both the results they produce and the way they go about producing those results.

You have to evaluate just how well people have done. Have they excelled in their job performance, delivering more than you had expected? Have they performed exactly the way you wanted them to and delivered good, solid performance? Or have there been problems, with some expectations unmet and some results left undelivered?

If your company does have a performance appraisal procedure, then it probably has an appraisal form, and that form probably has a rating scale. In fact, the form may contain rating scales for individual items and then a final rating that sums everything up. How do you use a rating scale well and make meaningful distinctions in individual performance? On a 5-level rating scale, how do you differentiate between someone who’s on the high end of the 3 category and someone whose performance has genuinely earned a 4? I will show you how.

Finally, how do you talk with someone who works for you about his performance? Whether the meeting is the fairly formal annual performance review where you go over the appraisal you’ve written, or the spontaneous coaching and feedback sessions that good managers routinely provide, you’ll need to have useful conversations that result in people’s doing their jobs better and working more effectively with others on your team.

In other words, this is a book for managers and supervisors—people who have to direct the performance of others and do all the tasks that an organization’s performance appraisal process requires. I hope the book is helpful to HR managers, training specialists, and senior executives, but those are not this book’s primary audience. My goal for this book is to give supervisors and managers who aren’t HR experts a solid guide to handling performance appraisal at an Exceeds Expectations level.

What the Book Will Cover

This book will explain how to handle performance appraisal confidently and successfully. No matter what the organization may be, and no matter where it is located—in the United States and Canada, in Europe, or in Southeast Asia or the Middle East—the performance appraisal process used by the great majority of organizations follows the same pattern. At the start of the year managers are expected to meet with each of their direct reports for an hour or so. In this initial meeting they discuss the individual’s goals and key job responsibilities. They talk about the behaviors and competencies that are important for the individual’s success in getting the job done the way the company wants it done.

After this initial planning meeting, individuals go about doing the job. Managers help them succeed by providing feedback on their performance throughout the year and coaching them to help them do better.

At the end of the year, managers evaluate how well each member of their team has performed and fill out their organization’s performance appraisal form. In almost every case, this involves assigning a rating using a rating scale. After the form has been completed and approved, the manager sits down with each individual, reviews the assessment, and explains the reasons behind the ratings. Once this performance appraisal discussion is over, the process begins anew with another meeting to discuss the goals and expectations for the next year.

That’s the traditional performance appraisal process. But companies expect managers to do more people-management activities than setting goals, filling out evaluation forms, and reviewing appraisals with subordinates. In the final chapter of the book I will tell you how to handle compensation issues and how to terminate those few people whose performance is so unacceptable that membership in the organization can’t be maintained. My goal is not to cover each of these topics exhaustively, but to give you just-in-time, immediately useful suggestions on how to get good at doing each of these additional management responsibilities.

I’ll have some unconventional advice for you. I’ll warn you against leaning too hard on the SMART acronym for goal setting. I’ll recommend that you not ask employees to complete a self-appraisal. And I’ll tell you why the time-honored sandwich approach to conducting appraisal discussions—in which the manager combines some feedback on the employee’s strengths and successes with a review of the areas where improvement is needed—is a really bad idea.

Simple, Effective, Done Right

Finally, let me tell you frankly that performance appraisal is strenuous and demanding. It’s the Olympic Games of management. And no matter how solid my advice may be or how skilled you may be as a manager, performance appraisal will always be difficult. I know that some people think that if somehow we get the forms, the procedures, the timing, and the training right, then performance appraisal will be easy.

That’s a myth. No matter how good a job we do at improving forms and policies, training and skills, performance appraisal will never be comfortable and routine. It will always be difficult because performance appraisal requires people in supervisory jobs to do something they have always been told not to do—be judgmental of others. Performance appraisal requires managers to stand in judgment of each person on their team, to evaluate just how well or how poorly they have performed, and then to review that assessment face to face. Very few people enjoy having their performance analyzed, documented, and discussed. It’s one of the hardest things we ask people in leadership positions to do.

There’s no way to make that job easy. But we can make it workable. And providing workable, tested, practical information is my goal for this book. My objective is to make performance appraisal and all of the activities connected with this procedure less taxing than they need to be.

Many of the problems presented by performance appraisal result from excessively complicated forms, cumbersome policies, and training that isn’t practical. Frankly, performance appraisal doesn’t have to be that difficult. In almost every organization I have worked with, the performance appraisal process can be simplified, the form shortened, and the administrative burden reduced, without any loss in the quality of the information provided to either the company or the individual. It is possible to keep it simple, make it effective, and do it right. And it’s possible for individual managers to do this, without the need for corporate permission or consent. Everything I recommend is simply good management practice.

Of course, if a company mandates that a long and complicated form be used and insists that complex procedures be followed, the individual manager is limited in what he or she can do to change this. But most organizations don’t insist, for example, that a dozen goals be set. They simply include a section on goal setting in the appraisal form. If a company provides a dozen or more competencies against which each person’s performance must be evaluated, there’s nothing that prevents the manager from telling each of his subordinates at the start of the year which two or three of those competencies will make the biggest impact—and carry the greatest weight when performance appraisal time rolls around.

Performance appraisal, done right, can produce the same powerful and beneficial results for everyone in an organization that it did for me at the start of my career. The techniques and skills that I’ll give you in this book, combined with your courage to put them to use, will benefit you, your organization, and every one of your subordinates who look to you for