While many managers quietly dread conducting annual performance reviews, we must remember that all employees need periodic discussions with their supervisors to determine the effectiveness of their performance. In addition, appraisals help management ensure that their own goals are being met. Follow HRdownloads Action Plan to implement effective performance appraisals for your employees!

It is crucial for the evaluator to fully comprehend both the positive and negative effects of performance-appraisals. Discovering a step-by-step method to developing feasible performance appraisal strategies can help clarify appraisal situations for managers by adjusting their perspectives on the true importance of performance reviews. Only then can the appraisal be utilized effectively in problem-solving.

1. Work Performance Factors
   - Service levels for internal and external clients
   - Communication skills
   - Job knowledge and application of knowledge
   - Initiative
   
2. Individual Work Performance Factors
   - Achievement of goals and objectives
   - Teamwork through development and coaching of others
   - Managing change
   - Problem solving
   - Special Projects
   - Specialized services
   - Time Management
   
3. Mutually Agreed Upon Goals and Objectives
   - Discussion of last years goals and objectives
   - Development of specific skills required for the position
   - Challenges
   - Training and development
   

1. Preparation - Preparation is the first step to any successful performance appraisal. Both the appraiser and the employee must participate in this preparation. Each participant must decide on specific instances—positive and negative—that are reflective of the employee’s performance. Each must also plan to discuss specific accomplishments and how these accomplishments may be built upon in the future. Use HRdownloads Employee Annual Performance Review template.All appraisals must include each party’s impressions of the worker’s personal development (and what changes, if any, need to be made). In addition, changes may be required in the work environment, in shifts or in arrangements between the employee and other workers to accomplish future performance goals.
2. Location, Location, Location- The next step is the actual meeting during which a discussion takes place between the supervisor and employee. The discussion needs to take place in the supervisor’s work area. During the appraisal both players need to feel equal. Although most appraisals take place while seated at the supervisor’s desk, many mangers find it beneficial to sit facing the employee without a desk or barrier. This seating arrangement encourages a more relaxed atmosphere, one that often is welcomed and creates more open communication by both parties.
3. Communicate the Process- At the beginning of the discussion, the supervisor needs to begin by defining exactly what will be covered and in what manner. Any misunderstandings will only create obstacles and conflicts in the relationship that supervisors may have previously worked to break down.
4. Use Active Listening- Active listening is the supervisor’s primary role in an employee’s self-appraisal. When the employee has completed his or her self-appraisal, the supervisor needs to respond in a constructive, positive manner-mentioning first the agreeable points, then the disagreeable points. During this discourse, it is important that the supervisor be non-judgmental and supportive. Even if the supervisor disagrees with a point the employee made, the supervisor needs to not to be overpowering. (Doing so will only cause defensiveness, a barrier to be avoided at all costs).
5. Create Solutions-When discussing what is considered an employee’s poor performance, the employee must be encouraged to work with management to solve the problem. Positioning such problem solving in “we” or “our” frames of reference (instead of to “you”) invites the employee to feel as if the supervisor is on his or her side. Finally, set specific goals to be reviewed again within a specified period of time.
6. Define Performance Problems-The more clearly a problem is defined, the easier it will be to find a solution. Not understanding what the supervisor considers to be “acceptable performance” is a common problem for employees. Provide the employee with a working definition of the terms for use, or present actionable statistics.
7. Avoid Misplaced Blame-When faced with any performance problem, the supervisor needs to realize that there are only two causes of performance problems: deficiencies in knowledge and deficiencies in execution. Deficiencies in knowledge are most easily identified. No matter how motivated they are or how hard employees try, they cannot do their jobs efficiently if they do not have the appropriate knowledge or training. A knowledge deficiency is the supervisor’s problem, not the employee’s problem. It is the manager’s responsibility to make sure workers have the necessary knowledge of do their jobs-and that they have demonstrated the skills to do the work. Deficiencies in execution arise when an employee possesses the skills and the knowledge to properly perform but for some reason does not. Unlike a deficiency in knowledge, a deficiency in execution is often the employee’s fault.
8. Set Objectives-Set individual objectives that are specific to each individual’s performance. (Define these objectives in numbers if possible). If an employee does not know how well or poorly they are performing, they will not change their performance. By setting reasonable goals for their work, development and career growth, the meeting may produce positive results for both parties.
9. Provide Feedback-Ensure that the employee is provided with feedback on their performance. The supervisor needs to arrange consequences so that employees know that a job done well makes a difference to them, to their supervisor, and to the company.