4 Game-Changing Tips for a More Effective Performance Appraisal Process

4 Game-Changing Tips for a More Effective Performance Appraisal Process

Every business owner wants their employees to always have good performance and productivity. To ensure this, some companies usually conduct performance appraisal to test employee performance on a monthly or specific period. 

Employee performance and productivity are key to the success of a company. Therefore, it is very important for HR to always monitor and evaluate it objectively through performance appraisals. 

But, how can performance appraisal be effectively executed? To address this query, Algobash has compiled several vital performance appraisal tips that can be implemented within your organization. Check out more details below!

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What is Performance Appraisal?

Performance appraisal is a method of measuring an employee’s performance. This method is known by several terms, some call it performance review, performance evaluation, and employee appraisal.

This method is one of the most important things in employee development. With this, companies can determine how far an employee has impacted the business. Not only that, but companies can also identify employees who have performance below the standard and require additional encouragement.

Performance appraisal can also be used for other important things such as providing feedback on the work already done by employees, determining the amount of salary increase, and as a consideration for promotion, transfer, or even termination of an employee.

In the implementation process, the division responsible for carrying out this method is HR. They will conduct testing based on the time frame and work targets as the standard of assessment in KPI (Key Performance Indicator). Then, after that, it is reduced into OKR (Objective and Key Results).

The time for performance appraisal implementation varies. Some companies do it four times a year, some only do it twice or once a year.

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Types of Performance Appraisal

There are several performance appraisal methods that companies can undertake, such as:

  • Traditional Assessment: This method is conducted through face-to-face interactions with employees to discuss and evaluate their performance over a certain period.
  • Self Appraisal: This method is carried out by each employee to evaluate their performance, but still under supervision.
  • Employee Initiated Review: This method is implemented by announcing to employees beforehand that a performance evaluation process will take place, thus motivating them to achieve their goals.
  • Feedback 360: This method is conducted by evaluating the performance of employees from all components of the company. Employees and other components within the company will also be asked for feedback for more effective outcome results.
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Tips For Performance Appraisal

As previously mentioned, performance appraisal is usually used by companies to evaluate employee performance over a certain period. This method is crucial as it can provide various benefits for both the company and its employees.

However, this method cannot be implemented arbitrarily. An effective strategy is needed to achieve effective testing results. To implement performance appraisal to its fullest potential, companies should follow the following tips:

1. Separate Performance Review from Salary Increase Review

Although this method is often used as one of the considerations for salary increases, to effectively carry out performance appraisal, HR must be able to separate performance testing from salary increase testing.

Performance testing and salary increase testing for employees are two different things. This is because the components of assessment that must be considered between the two are also different.

Performance testing has the main function of monitoring the professional abilities possessed by employees in their work, such as identifying their strengths and weaknesses.

Meanwhile, salary increase testing has a wider range of assessments. HR cannot just look at performance alone. Other aspects also need to be considered such as company conditions, finances, and many others.

So, if the goal is only to review performance, then separate it from the salary increase review to get the most optimal assessment.

2. Determine KPI Strategically and Ensure Employees Understand It

Next, to conduct a more effective performance appraisal, HR requires a standard of evaluation through KPI (Key Performance Indicator) that has been determined by each manager in every division of the company.

As an indicator or standard of evaluation, KPI must be prepared correctly, objectively, and measurable. To make it easier, you can use numbers. For example, the marketing team must be able to generate 3000 leads every three months. If employees succeed in reaching the KPI, it means that the employee has a good performance.

After determining KPI, the next thing to do is to ensure that all employees in the company understand it. Communicate from the beginning about the indicators in KPI so that they are motivated to achieve the target.

3. Evaluate Objectively

After determining KPI and employees understanding all the indicators, the next step is to conduct the evaluation process objectively. For more objective evaluation, you can apply the feedback 360 methods. Through this method, you can minimize bias that may occur if using a regular method.

This is because feedback 360 conducts a comprehensive assessment from various sides. You can receive various directions or inputs from many parties, including the employee’s colleagues.

4. Dont Compare Your Employees and Announce Results Transparently

Ultimately, after carrying out an objective evaluation, every manager in each division should transparently announce the results to each employee. Communicate the assessment results as effectively as possible with them. Remember to never compare one employee with another. Each employee is assessed based on the established KPI, so they should only compete with themselves, not others.

In this stage, managers should act as coaches, with good leadership. They should be able to guide their team members in understanding their strengths and weaknesses that need to be improved in the future.

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Review Your Tech Team’s Performance With Algobash

In addition to evaluating through KPI (Key Performance Indicator), certain technical positions, such as IT teams, require more strategic evaluation methods.

Through Performance Appraisal, employees are usually evaluated just based on work targets. This is certainly not optimal for evaluating the performance of tech team members.

Therefore, the company needs to combine it with more effective methods. One of the best solutions is to conduct technical skill testing with Algobash.

Algobash has pre-employment test software that can be used to test the soft skills and hard skills of employees in the company, from coding tests, project-based tests, case study tests, psychological tests, and many more assessment features.

By conducting technical tests through Algobash for performance reviews or appraisals, your company can maintain and enhance the quality of the tech team’s skills, ensuring that the performance and productivity of employees are maintained and developed.

Interested in trying Algobash’s pre-employment test software for a new and more effective experience in reviewing employee performance? Visit Algobash.com or register for a demo here.

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