Getting Employee Performance Evaluation Right - Empxtrack
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Most companies want to conduct employees performance evaluation on a periodic basis and their Human Resources  department is generally responsible to manage this process. I have often seen that the buy-in and participation from the Line managers is not as much as one would expect. Based on my meetings with a large number of HR managers, Line Managers & Senior Level Executives, I have come to realize that there is much more to Performance Evaluation than what is truly understood by all stakeholders.

This article discusses how HR Managers can create an effective Performance Evaluation system that adds true value to the organization and becomes a useful and strategic employee development tool.

Define the Objectives of the Employee Performance Evaluation System

Do HR managers understand why organizations need to carry out the Performance Evaluation? Some of the common reasons are:
Define the Objectives of the Employee Performance Evaluation System

  1. Salary Increments: Commonly believed to be the only purpose from an employee perspective and typically the least important from the management perspective.
  2. Goal achievements and related bonuses/commissions.
  3. Promotions and transfers
  4. Succession Planning
  5. Identification of Top Performers and Non-performers
  6. Identifying Competencies Gaps for Training Management
  7. Confirmation of probationers

The objectives may differ for different levels of employees but together these help in defining the performance evaluation content, forms, ratings, weights & scales, employee evaluation parameters and the appropriate process for conducting the appraisals.

Understand the Process of conducting the Performance Evaluation

Understand the Process of conducting the evaluation Once objectives for the Performance Evaluation are identified, it is important to define the different steps in the process. The same process may not fit all situations.

For instance, Succession Planning, Promotions and Transfers will typically involve Heads of Departments and Senior level managers in the decision cycle whereas Salary Increments, Goal Setting and Tracking, Confirmation of probationers & competency gap analysis, may require participation of Line Managers and 2nd level managers.

In cases where only white-collar employees are being appraised, we may like to involve appraisees at the start of the process by including a self evaluation and an acceptance at the end of the process. In evaluations for blue-collared employees, the employees may be involved only at the end.

Similarly, in an hierarchical organization the work-flow and relationships will need to be defined well to begin with (especially for special cases such as heads of departments, General Managers etc.) and in a Matrix organization the focus may be on peer, senior and subordinate reviews.

Without getting the performance evaluation process right, it is very difficult to get required participation from the stakeholders.

Communicate repeatedly the objectives of the Performance Evaluation

HR can play a vital role by communicating the objectives of the evaluation process to both employees and their managers. Structured and timely communication can help everyone appreciate the performance appraisal methods and encourage transparency and objectivity. I have found that if HR communicates the process extensively, the level of participation and enthusiasm is higher and the process completes without delays.

The different ways in which communication can be carried out include:
Communicate: communicate the objectives of Appraisals

  1. Publish on the employee portal the start of the appraisals, the process details and key time-lines.
  2. If yours is a large company, it may be a good idea to print some posters and display these at strategic locations.
  3. Definitely include the details of your employee performance evaluation process in the Employee Handbook.
  4. Hold workshops for employees and managers: explain the appraisal process, answer queries, describe scenarios and mention benefits.
  5. Develop an introduction form that should communicate the performance evaluation process from each stakeholder’s perspective. The form should communicate the role of employee, manager, and any other people involved in the process.
  6. Don’t hide any surprises. If you Normalize employee scores, include that in all communications such that employees and managers are aware that final scores may be changed.
  7. If possible, involve senior management in talking about the importance of the appraisal process and its timely completion.

Timely completion of Appraisals is a must

Stated mathematically: Enthusiasm is inversely proportional to the time taken to complete the activity i.e if the evaluation takes longer, the enthusiasm in it will wane. So, what are the ideal time-lines for an appraisal?

In working with many companies I have found that each step in the performance evaluation should take no longer than 4 to 5 business days. As an illustration, the different steps in the appraisal and their time-lines may be :

STEPS in Performance Evaluation
PROPOSED TIME-LINES(business days)

Employee Completing their self-evaluation and submitting to their managers2 daysManagers completing the employee evaluation and submitting to the next level5 to 10 days (depending on the team size)Heads of Departments finalizing employee scores for their departments and releasing to HR2 to 5 daysHR conducting Normalization (removal of manager bias) across the organization, finalizing scores and submitting evaluations for discussions3 to 12 days (depends on the level of interaction required)Managers discussing appraisals with employees and submitting for their final acceptance2 to 5 days (depending on the team size)Employees accepting their appraisal and signing off1 dayTotal Time Taken15 to 35 days

To ensure that the time-lines are met, HR should constantly get a status check on the process and not hesitate to remind employees & managers when behind schedule. Don’t hesitate to involve senior managers if the process is way behind schedule. Read an article on How HR Managers can Design effective Performance Appraisal

Does access to an archived performance evaluation record help?

Managers expect behavioral changes in their employees based on past years discussions. In addition, employees and managers decide on an Access to archived-appraisals achievement plan for the next year which could include target achievement plan, development plan, mentoring plan etc.. Without access to these notes, recording achievements in the next years evaluaiton is not only difficult, but it makes the process less objective.

Add to this the challenge of changed employee-manager relationships over the year; each year’s appraisal becomes a new beginning instead of a continuation of the employee’s performance over many years.

How can the HR department help in this?

For one, HR should introduce a process of goal setting where employees and managers define the goals at the beginning of the year and submit to HR after finalization. Don’t worry if the goals are not SMART to begin with.

Secondly, HR should provide access to past appraisals and goal achievements of employees to the managers.

Of course, this can be a challenge if you are spread across many locations or have difficulty in managing thousands of electronic or paper based appraisals. We shall discuss this in the Performance Evaluation System as an Enabler section ahead.

Integration of employee evaluation with other data is important

In most organizations, performance evaluations are largely carried out on goal achievements and competencies or skills. Are these the only two areas on which managers should appraise employees? Would it be helpful to know details of many intangibles such as:
Integration with employee career profile

  1. Number of rewards/ recognitions
  2. Involvement in a disciplinary case,and violation of safety norms
  3. Timeliness of employee (How many times was the employee late, how many times did the employee take leave without permission from the manager etc.)
  4. Type & duration of training attended
  5. Employee counseling records.
  6. Participation in external events that got the company some recognition
  7. Publications/ contributions to professional journals.
  8. Opinions of other employees and seniors, especially for employees in leadership roles.
  9. Length of service and other employee related data, especially past experience & qualifications
  10. Employee achievements note with review by the manager & seniors.

Our experience, while working with many organizations, reveals that most managers remember the last few months of employees contributions (or the lack-of it) and rate employees on that bias. To avoid this, we strongly recommend that multiple data points are linked to the appraisal and are freely accessible to the manager to accurately rate an employee.

Performance Evaluation System as an enabler

The biggest challenge to implement an effective Performance Evaluation process is the large volume of data that has to be collected and managed on a daily basis. In addition, linking Performance Evaluation System as an enabler data from various sources, providing up-to-date status reports to the management, validation of completed appraisals, normalization of scores, and finalization of appraisals for increments, promotions etc. is a time consuming and laborious task.

Availability of on-line help, for example details of rating – that pops-up when the manager wants to rate a competency can help managers quickly complete the appraisal.

Recording on the employee’s Goal Sheet the periodic achievements & status of completion of each goal along with counseling notes of the manager is not possible without technology.

An integrated HR platform such as EmpXtrack can help in quickly meeting the objectives of the Performance Evaluation Process with minimum additional effort.

The ready-to-use Performance Appraisal module with multiple form templates, numerous work-flows, built in validation and automatic calculation of scores, reminders and escalation messages, on-line help and availability of instant status updates helps in putting the process on an auto-pilot and can save significant time for both HR and the line managers.

EmpXtrack is an integrated HR software that combines all aspects of employee life cycle in an easy-to-use browser-based application. It integrates Goal Setting and Tracking, Performance Appraisal, Training management, Time, Leave and Attendance, Recruitment, Rewards and Recognitions or other employee related data. All these can be automatically captured or imported in EmpXtrack and can be linked to the Performance Appraisal module for an effective, transparent and objective evaluation.

Read more on Employee Performance Management (EPM) in our white paper published on our web-site earlier.

To help design an Appraisal System for your organization or to enable an existing process on a web-based software you may Contact Us with details of your requirements or read the online help on Configure EmpXtrack Employee Performance Evaluation System