Performance appraisals are problematic for many companies because they are stressful and often ineffective. Improving the effectiveness of performance appraisals is difficult because effectiveness depends partially on activities outside the actual appraisal. While in the meeting, it is important to use neutral language and to focus on improvements rather than threats. In order to ensure that the appraisal goes smoothly, preparing documents in writing and ensuring that all employees understand what is expected is always a good idea. An effective performance appraisal is one that generates the appropriate results, and for each company a process of development may be in order.
One of the most important aspects of an effective performance appraisal involves engaging the employee in a dialogue about how he or she has been working. A conversation is more effective than a lecture because it keeps the employee engaged and can help point out why problems might be arising. Setting aside enough time for these conversations can be difficult, but the individual engagement is typically important to building employee loyalty and creating constructive relationships between management and employees.
Creating solid objectives is a very important part of an effective performance appraisal. An employee should not leave an appraisal without a clear understanding of which parts of his or her performance need improvement and where his or her career is headed. Without goals, employees often get frustrated and feel that these meetings are merely critical. Objectives create a built-in constructive element to performance appraisals.
It is important to make sure that appraisals are fair and honest, which means that they must be highly regular and the same for all employees. When expectations are applied unevenly, employees often feel they are being treated unfairly. Also, legal complications can arise if problematic language enters the appraisal. Determining what is and is not appropriate in an appraisal is important before attending these meetings. Each company must make sure all managers understand the rules and standards of these appraisals.
Giving an effective performance appraisal also depends on the philosophy of appraisals to which a person or company adheres. Some groups feel that the purpose of these meetings is to give the employee the opportunity to improve. Others use these meetings to instruct employees about their status in the company and their risk of being fired. Either way, communication and clarity are key to making sure both management and employees get the most out of the meeting.
Many people feel that the yearly model of appraisals is not effective. An effective performance appraisal model might involve more frequent meetings or ongoing constructive criticism from various parties. Effective appraisals of this type do not always show clear improvement, but they do keep employees and management in close discussion. Which schedule works best depends on the company and the established expectations of the industry.