Employee performance appraisal is a part of HR strategy, it enables the company to manage overall organizational performance and track employee individual contribution to the company goal achievement. On the one hand, through this practice management can assess company performance by the team and individual goal achievement analysis, on the other hand, this is one of the tools that can be used to motivate and develop team members/staff.
There are several approaches to the performance appraisal process. Depending on the needs and goals of the company, it is possible to use any of them directly, as well as to create a certain hybrid version. Below you can go through some of the most commonly used methods:
360-degree evaluation – through this method, each employee can be evaluated by several stakeholders that have different kinds of working relationships with him/her. These stakeholders might be direct supervisors, teammates, subordinates, customers, or suppliers. It is also possible to incorporate the self-assessment component. This method is quite time-consuming in terms of implementation, however, it creates a very comprehensive and objective picture.
Evaluation by results – Some several variations and names represent this method. The main idea is that with this approach, the company evaluates the employees based on their results, which should be represented in numbers and correspond to the numerical goals of the whole company. This evaluation system helps the company to create an achievement-oriented culture and to align various financial and/or non-financial incentive systems with the results achieved.
Evaluation according to the job description – this method is very practical and simple. A well-drafted job description should accurately reflect the obligations and expectations that exist towards the employee. Accordingly, when conducting an appraisal based on an individual job description, the manager has the opportunity to give the employee feedback that is tailored to his/her functional role in the organization.
Team Appraisal – This approach is a relatively new concept of company performance management and focuses on setting and evaluating team results (and not only individual). This approach enhances a team spirit within the organization and enables the company to achieve results through boosting teamwork and potential.
As mentioned above, a precondition for creating a successful appraisal system is understanding the needs and the goals of the company, only after understanding these two it is possible to create a very effective appraisal method.
Based on the experience of the Business Development Team at SavvY Consulting, we would like to share several important tips to help you make this process useful and productive:
Base the system on the goals and desired culture of the company – Discuss with the team, depending on your strategy, what goal would you like to achieve in the company through the evaluation system. What kind of culture do you want to reinforce with the appraisal process, or are there any significant internal change management processes in the company that can be enhanced through an appraisal system?
Include direct managers in the creation process – If you are an HR manager, or the person responsible for creating the evaluation system, it is very important to have direct team managers in the creation process as they have the best understanding of the needs of teams or individuals. This will help you to design the best method and people will easily adapt to it.
Be growth-oriented – the system you create must be growth-oriented. This kind of mindset will increase employee motivation and engagement. It will also enable the company to see the competencies and skills that must be developed in employees in order for the company to maintain a competitive advantage in the market.
Create an action plan based on feedback/appraisal – make sure all employees leave the evaluation process with a specific action plan. This will help to establish a mentor-mentoree relationship between the supervisor and the subordinate, also will reinforce clear expectation setting towards team members.
Employee performance evaluation is one of the most important components of HR strategy. This process creates the necessary preconditions for achieving the strategic goals of the company. There are several digital platforms (e.g., Time SavvY) to simplify the employee appraisal process that makes it easy to track how team members are distributing their time on different tasks. Consequently, the process of employee appraisal and feedback is easier and the company management can see whether employees’ daily tasks correspond to the company strategy and action plan.