Performance Appraisal System

Introduction

A performance appraisal system is a structured process to review and discuss an employee’s performance of assigned responsibilities and tasks as well as the achievement of goals over a specific time period. It strengthens an organisation by enhancing and reinforcing the link between individual and organisational performance.

Why

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This toolkit is relevant for your organision when it:

• is growing in number of staff and needs an efficient system to support the staff in their performance.
• needs a systematic tool to link employee’s goals to organisational goals and periodically measure and evaluate the outcomes.
• want to link personal performance to personal development plans, training and/or salary increments in order to increase an employee’s motivation.

What you can expect

In eight steps this toolkit guides you in creating a performance appraisal system. Here you’ll find a step-by-step guide, tools, examples and other resources for setting up such a system.

Step 1: Identifying Owner

• Nominate an owner from your team to be responsible for the performance appraisal. The ideal owner has human resources related experience or is a member of the leadership team or board. The lead can also have a volunteer supporting in executing this.
• Set up a working group consisting of relevant members for creating the appraisal.

Watch this video produced by the University of Ghana, giving a solid introduction of performance appraisal:

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Step 2: Setting Objectives

• Set objectives as a group.
• Clarify the organisations needs and the expectations of a performance appraisal. "Why do we need such a system?"
• Set clear objectives of establishing or improving the performance appraisal system. "What do we want to achieve? What do we want to happen in the organisation?"

Step 3: Developing Appraisal Process

• Define the steps involved in the appraisal system. The process typically includes:
  • introduction
  • employees' self appraisal
  • evaluation
  • supervisor's feedback or team feedback
  • decision making (such as promotion, salary, training)
  • mid-term review
• Identify who is responsible for each step.
• Set a timeline for each step.
• Think about the different methods that can be used to evaluate performance, such as management by objectives, rating scales, 360 degree feedback reviews etcetera. Watch the following short video to get a better idea about the various appraisal systems.

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Step 4: Creating Appraisal Forms

• Create a simple and easy to understand appraisal form.
• Depending on your performance review system, it may include:
  • performance indicators (= common indicators that represent the organisation’s values and position specific indicators).
  • an overview of the past year, new goals for the coming year.
  • a unified rating method.

Step 5: Writing a Guide

• Write a brief introduction to the performance appraisal (such as what it is and why it is important).
• Give an overview of the process and the different steps involved.
• Explain the use of the appraisal form.
• Add information for the supervisors on how to appraise employees in an objective manner and give constructive feedbacks.
• Making an introduction video about the appraisal system is also a good idea. Watch this short video from Dubai Media inc. that explains their appraisal system to their employees. Do you already recognize what type of appraisal system they have?...right, a rating scale!

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Step 6: Approval

• Present the guide and the forms to the relevant staff and leaders for review and approval.
• Review the system with the feedback they gave you.

Step 7: Training

• Support your whole team in:
  • understanding the appraisal system.
  • why it is important and how it works.
• Train the members to fill the performance evaluation form.
• Coach managers in having performance discussions with their teams.

Step 8: Implementation

• Support the teams with implementation, take part in planning and scheduling the performance appraisals, participate in performance appraisal discussions, help analysing the result and link it to professional development plans, trainings and/or increments.
• Evaluate the system on a regular basis and revise it if necessary.

Key To Success

• A strong owner for the process helps to make the performance appraisal system a succes.
• The system should be simple and easy to use, for example by providing templates. A training or workshop can be organised to ensure everyone understands the need of the system and to coach them how to use it.
• Assistance in the first implementation, evaluation and revision is necessary.

Challenges

• Your organisation has limited or no experience and/or knowledge in conducting performance appraisals.
• Lack of time or priority can make it difficult to implement the system.