Performance management is not a standalone event conducted by organisations every once in a while. It’s a continual process that helps organisations and their employees improve their performance by ensuring that individuals and departments set goals aligned with the company’s overarching objectives.
For effective performance appraisals, it’s important to consider the organisation’s strategic objectives. This helps because they will determine the kind of goals departments and the individuals within those departments create for themselves. Having clearly stated organisation goals helps the company know what metrics to track during employee performance appraisals, so you could say that effective performance management begins from this point.
Another important thing to note is deciding how often appraisals should be done. As we mentioned earlier, performance management is a continuous process. So, it is important to set reasonable timelines that allow room for improvement and reassessment. Appraisals also should not be too few and far between because that could render the entire point of the exercise ineffective.
Below are a couple of performance appraisal methods you can consider implementing in your organisation.
Also known as multi-rater feedback, a 360-degree appraisal is a performance appraisal method where employees get feedback on their productivity and contribution to the organisation, not just from their direct managers and supervisors but from other staff and even customers.
This appraisal method will require about 6 – 10 contributors arranged into different groups based on their relationship with the focus employee (supervisor, peer, subordinate, and client, where applicable) to complete an anonymous survey or feedback form.
The raters respond to questions that score the focus employee on skills like leadership, communication, competency, etc. The feedback form will include responses from the subject and should be preferably managed by an external appraiser.
Benefits of 360-degree feedback
1. Builds employee development
This method of feedback shows the employee how others see them as compared to how they see themselves. It allows them to be more self-aware and understand their strengths, weaknesses, and see opportunities for growth.
It can also help employees understand how their behaviour affects the quality of their work, and other employees in the workplace.
Armed with this information, employees can identify their training needs and can be more effective in their role and better contribute to organisational growth.
2. Improved customer service
In cases where clients and customers complete this survey, employees get an insight into how the consumers perceive them so they can work on their customer service skills and learn to build better customer relationships.
This, in turn, improves customer experience and brand perception from your customers. The resulting positive customer experience helps your customers become brand advocates, ultimately improving organisational profit.
3. A platform for objective feedback
Since several people contribute to 360-degree reviews, the feedback is more valid, objective, holistic. While one person’s opinion can be biased, having similar feedback from multiple individuals is more likely to be accurate.
4. Builds motivation
Positive feedback from multiple raters (contributors) helps to build the focus employee’s confidence and strengthen their motivation to do better work.
The employee is likely to do better in that area and take the time to improve on those strengths. At the same time, the employee is also encouraged to build other strengths and work on their weaknesses.
5. Allows for anonymity
Because this feedback method is anonymous, the focus employee can understand how their team members and colleagues perceive them without directing animosity at anyone.
This makes it easier to get employees to provide honest feedback on their colleagues without dealing with the backlash.
Drawbacks to the 360-degree feedback appraisal method
1. Conflicting opinions
Due to different relationships between colleagues in an organisation, Feedback can be conflicting and lead to debate on which appraisal is more accurate.
Contributors with personal grievances against the focus employee may lack objectivity, focusing on the negatives. This leads to tainted feedback which provides no real value.
2. Less effective in smaller organisations
In smaller organisations, 360-degree feedback can be less effective as there are fewer opinions, giving more room for bias. It’s also easier for personal grievances can affect ratings in small organisations.
This is a performance management appraisal method with just two people – the employee and their direct manager. The employees’ performance is rated based on the feedback from their manager, and decisions are made based on the results provided.
In the linear appraisal method, employees are evaluated based on their individual KPIs/OKRs (held up against the organisation’s objectives) and other performance metrics like behaviour, leadership, competency, and adherence to the company’s core values.
Benefits of linear appraisals
1. Improves communication
Linear appraisal involves constant communication between the employee and their supervisor. So, throughout the appraisal period, the employee receives constant feedback and other recommendations to improve their productivity from their manager.
It also allows the employee to discuss challenges that their supervisor might not see or be otherwise aware of, leading to improved performance.
Linear appraisals give managers and direct reports room to have the sometimes uncomfortable but necessary conversations needed for employee and organisational growth.
2. Provides direct motivation
The linear appraisal method is set up so that the supervisor acts almost like a mentor in guiding employees on their career journey by providing feedback on their weaknesses and praising wins while encouraging employees to do better.
3. Helps in planning learning and development
Since the manager is directly involved in the employee’s growth, training specific to the individual employee’s needs can be planned and set up. This way, the organisation knows the training employees need to increase productivity and meet organisational goals.
4. Directs promotion and other post-appraisal actions
A linear appraisal is effective for identifying specific areas of strengths in an employee. Managers can then recommend them for either a promotion, redeployment, demotion, or that the employee remains on their current level, as they deem necessary.
Drawbacks to linear appraisals
1. The halo effect
The halo effect happens when one person is positively biased towards an employee and focuses on their strengths while ignoring weaknesses. This makes it difficult to recommend an improvement for the focus employee.
2. The focus effect
This is the opposite of the halo effect. In this case, a personal bias or grievance against the employee can negatively affect their appraisal. This makes the supervisor focus on only their weaknesses while downplaying or forgetting their wins.
3. Time constraints for managers
In larger companies, or in companies with a larger manager to direct report ratio, appraising each employee under the supervisor or manager can be a time-consuming process for the manager.
This is worsened if the company uses a manual performance management process where the manager is expected to fill paperwork detailing each employees’ strengths, weaknesses, achievements etc.
Choosing the right performance appraisal method for your organisation
In some organisations, a better method of performance management is the linear appraisal method. The 360-degree appraisal method is best used in organisations with many employees and where employees work around different verticals.
Linear appraisal methods would serve small businesses and smaller organisations where constant communication and direct reporting with management and individual staff members are required.
360-degree and linear appraisals are both valid methods of performance management, so it’s up to you to choose which one works best for how your organisation operates. Your company can also choose to use both methods, alternating either to suit the way a particular department works.
Whichever appraisal method you choose, you need a performance management software like SeamlessPerformance that helps you build a high performing team by aligning individual and departmental goals to organisational objectives, while managing the appraisal process from start to finish.
To see how SeamlessPerformance can help your organisation meet its goals, schedule a demo with us today.