5 Ways to Make the Most of Performance Appraisal Data
A chief executive officer of a company deputed a senior executive in charge of turning around a division that was loss-making for them. He was instructed to turn around the finances within a year if they had to retain the unit.
The senior executive ensured that within a year and a half the unit turned in profits. He expected accolades and a promotion as well as a hefty salary jump.
However, this did not reflect in his performance appraisal. His CEO in fact rated him averagely in spite of him turning around the unit.
The CEO’s feedback was that though he stuck to the mandate and turned in profits for the division, he did not do it in a manner that was in tune with the organisation’s vision and way of functioning. He had let go of several good employees that the company valued, put in place executives that did not share the same values as the company and made the environment difficult to function overall. Therefore, he was not being given a promotion.
This is a perfect example of a mismatch in performance appraisal objectives, and a lack of clarity on what is to be appraised.
Typically a performance appraisal should cover basic aspects such as :
a) Provide accurate feedback on the performance of an employee
b) Use the data you have obtained to put in place more effective work habits
c) To help employers assess future job assignments and compensation
While human resources professionals clearly understand the importance of optimal performance management, they often face significant internal obstacles.
Performance appraisal should ideally focus on both the behaviour and outcomes. While all the current data gathering methods focus on results, how an employee has gone about doing a task also has to be part of the evaluation system – and there is often no data available to show this. Yet, it influences an employee’s appraisal outcome.
Here are five ways we feel you can optimise the outcome of the performance appraisal process:
1. Identify critical skill gap at an organisational level:
Identifying a skill gap is central to making your workforce more competitive. It will give you an idea of the gap between the future skill needs of an organisation and the current abilities of the workforce. This is absolutely necessary for a company to advance, which won’t happen unless specific skills are acquired or improved upon. One of the companies we came across in training was eager to improve teamwork but on a deeper analysis, we found the gap actually was in the leadership, which required a different approach to training.
An effective way to find out an organisational skill level is to carry out an extensive survey. You should analyse existing skills and understand if employees can learn any new skills through training or if you may need to hire different workers. It will help your company focus on what training is required at a fundamental level and spend money and time on it. Only then will it be effective.
2. Draft Individual Development Plans (IDP):
A well-thought-out plan listing short-term and long-term goals and a clear guiding path will provide your employees with opportunities and clear direction on how to increase their skills and advance their careers. An enhanced skill set will help the business grow. Once the business goals are identified, have a thorough assessment of your employee’s skill set and where they want to grow with their career.
Does this fit into the plan of your organisation? Only if the answer is yes you need to seriously plan their career development. It is important to make sure that they not only suit the role but are also ready to take on responsibilities. Once all aspects are considered, a good individual development plan that includes training and development should be devised.
An IDP can also be developed for employees who are not performing at their expected skill level to help them improve their performance levels.
3. Review the feedback received and take relevant action:
It’s not just a drop in the bucket or a pat on the back, there is systematic of providing feedback consistently that will produce fruitful results. All feedback that is given should be constructive, task-focused, clear, and specific. Comments like “your work needs improvement”, will just leave the employee confused and sometimes even angry. It is not going to be useful.
The performance appraisal should assess the reason for the poor performance, and also provide an action plan to get the desired results. The feedback should also be timely. As part of the performance management process, we also recommend that the manager & employee must keep revisiting the feedback to see if the process is changing.
4. Better manage your high performing employees:
A sense of direction is often the main characteristic that differentiates a high against average performers. High achievers typically know what course to take to complete a project, whereas average workers may need a push in the right direction. In our experience, we have seen the best-performing companies have a well-developed system in place to identify high-potential employees and turn them into production powerhouses.
High-performance employees are life-long learners. They will understand the importance of training and get it done. A great way to recognise a high-performance employee is to give them developmental opportunities. Do they take advantage of the opportunity, or not? Do they hold back or rise to the occasion? How they receive feedback? Do they have the right attitude?
A performance assessment will have to include understanding their aspirations, making career development plan and also help reward them for their contribution to the company. Business owners who understand how to distinguish between high-performance employees and average performers can also use the information to bolster overall productivity.
5. Embrace the career planning strategy:
Over the decades, career development has seen a shift in approach. Traditionally, it was up to an organisation to ensure that its employees had the skills to meet the company’s long-term goals. The new approach advocates that employees should take responsibility for their own career development. Career planning should not only include the progress of the company but also take into account the employees goals & aspirations. This can be key to a company’s attraction and retention strategy.
We strongly advocate that organisations look into two factors when putting together their career development plan ie; the company’s overall business plan and how it can be integrated with an employee’s career goals. Career paths can include promotions or lateral transfers. A solid career path programme requires detailed job description and support through management coaching. Also, these plans should be individual and should cover the gaps in the current role, manage future aspirations and then devised.
Clear visibility, regular individual analysis, and company-wide employee appraisals help identify corporate competencies and skill gaps. With this valuable data in hand, companies can identify training and development plans.
When effectively implemented, performance management best practices result in a wide range of benefits not just for employees but also for managers and companies.
Yellow Spark can help design a suitable and holistic performance appraisal system for your company which goes beyond the most obvious data points so that companies can build a stronger and more competent workforce. To know more write to us at firstname.lastname@example.org
Author Profile: Aparna Joshi Khandwala is a passionate HR professional. She co-founded Yellow Spark to work with like-minded people who believe in the power of leadership, which is the only business differentiator in today’s time.