How to make performance appraisal effective?

As the world changes at an increasing rapid rate, modern day organizations need to be more agile and change friendly. In order to be change friendly, there are a number of key factors that a performance management system should have.

Let’s look at the three most important factors, and identify the features of an effective performance management system in a rapidly changing environment . Putting your best efforts into performance appraisals will result in benefits exponential to the time spent during the process.

Here are three secrets to make performance reviews more meaningful to you and your employees –

Plan well. Performance appraisal is not just a one-time meeting, but something to carefully plan and prepare for. Lack of preparation could negatively affect how you are viewed by your team, regardless of how lucratively you reward them with the yearly bonus.

Significant thought should go into preparation, not just about top-line results…it is the best time to convey some of the key messages too. You must consider what is the overall feeling you would like your employees to leave with after their performance appraisal meeting. Lack of preparation diminishes the value of the performance appraisal with your employee.

Reward your employees. Or you may lose them to the competition. Performance reviews have become an even more important aspect in making sure high-performing employees are recognized. It is important in some instances to reward failure. The best way to get employees to take risks and change – is to reward them for it, and in some cases to reward them even if they are not successful.

If you don’t reward your employees for any change that they had to undergo for the organization or the risk they took for the benefit of the organization – all too often employees will never take risks and will not accept change because they were never rewarded. Organizations need to build into their performance management and reward systems the concept of good failures of their employees.

Understand your employee’s goals and objectives. Your goal during the performance appraisal is to ensure you have comprehensive understanding about the employees’ performance, their achievements and failures/pitfalls. You must understand their next year’s goals and objectives, and their development plan.

Once you focus on gaining agreement during each aspect of the performance appraisal, it will help you ensure that they hear your point of view and you hear their point of view. It is crucial to reach a mutual understanding on your shared view of their professional and personal aspirations.

The bottom line is to know whether you are doing well as an employer or a manager, when it comes to performance appraisal, employees should not be petrified of walking into their annual performance review because nothing you discuss should be a surprise to them. Watch the faces and reactions of your direct reports. If you have planned well for the performance appraisal, your employees will realize that it is merely one more discussion in the on-going dialog of how he/she is performing.

Make use of these three unspoken secrets to make performance reviews relevant by taking the time to prepare and by showing compassion to your employees during their performance appraisal. Accurately praising your employees for their role is predominately crucial – not only for the perpetual success of your employees, but for the incessant success of your company as well.