Performance appraisal strategies that work with real-life examples

Annual performance review cycles are so last year.

Waiting to hear a year’s worth of notes in one meeting means employees aren’t receiving feedback when it’s relevant or impactful. Using outdated performance appraisal strategies like the annual review frustrates employees, stalls productivity, and stagnates business growth.

To keep teams moving forward, managers should share constructive feedback at a regular cadence. Say goodbye to yearly meetings and hello to people-first processes with these performance appraisal strategies that actually work.

What is a performance appraisal?

A performance appraisal is a structured process that evaluates an employee’s contributions to the company. Like a traditional performance review, it involves setting and tracking progress toward performance goals, identifying opportunities for development, and discussing growth opportunities. But appraisals occur frequently and consistently, helping employees and managers stay aligned on what’s working and what’s not. 

With an effective performance appraisal process, you can expect the following benefits:

• Motivated employees: Reviewing past achievements and setting measurable goals can motivate employees to continue improving.  
• A record of wins: Performance appraisals should be a celebration. When team members have met or made meaningful progress toward goals, highlight those successes. Identify and praise key results to boost confidence and engagement.
• Up-to-date insights: Ongoing feedback means that it’s easy to check on an employee’s performance at any point in the year. 
• Clear areas of improvement: Reviewing progress toward performance goals, including areas where employees fell short, identifies where to focus on improving. 
• Improved productivity: Conversations about performance offer the chance to give constructive feedback, congratulate employees on meeting previous goals, and address any concerns they may have. These topics lead to discussions about how to focus on the tasks that drive the most impact. 

• Progress toward organizational goals: When everyone performs their best, your organization flourishes. During appraisals, managers can ensure that employee goals align with organizational goals. That way, when one person succeeds, everyone does. 

What are the effective ways to conduct performance appraisals?

Performance appraisals should motivate and inspire employees to realize their best, not serve as an arena to review everywhere they missed the mark. Here are a few leading methods of performance appraisal that clarify the objectives of performance management.

Management by Objectives (MBO)

MBO is a type of performance appraisal where you set SMART goals and align them with department or company goals. MBO is great for data-first employee goals where performance is objective and professional development is easily measurable.

How frequently you check in on MBO objectives depends on the role, but it could be as frequently as each week.  

Self-appraisals

Self-appraisals give employees direct questions to reflect on, from weaknesses and strengths to professional development goals or recent achievements. Comparing self-appraisals to other team members’ reviews, whether they come from peers or managers, can give context to performance. These are best done quarterly or semi-annually to avoid too much repetition in responses. 

Managerial reviews

Managerial reviews are typical performance appraisals that take a top-down approach, where a manager reviews their direct reports.

Peer reviews

Asking other team members for employee feedback is a great way to collect holistic feedback. Teammates often have more visibility into the day-to-day workings of each employee, meaning peers can provide useful qualitative feedback.

Subordinates Appraising Manager (SAM)

Feedback should be a two-way street. Managers, just like their reports, need feedback to improve. SAM reviews give employees space to conduct a bottom-up performance review. 

360-degree feedback

Performance reviews that focus on 360-degree feedback asks for input from peers, managers, and direct reports to give a rounded perspective. For collaboration-heavy environments, this is an excellent option to get a complete understanding of an employee’s performance. 

Customer or client reviews

Sometimes, an outside perspective has the clearest vision. Client feedback can reflect on customer service skills, soft skills, and problem-solving. 

Assessment Center Method

An assessment center is an abstract method where teams take part in simulated exercises to test their competency. Your business could use these simulations to identify the capacity for professional development in certain employees, like leadership skills. These are best done at longer intervals, like semi-annually, to allow adequate time to improve between sessions. 

Behaviorally Anchored Rating Scale (BARS)

BARS rates employees on a scale of 1-5 by matching their recent performance to a set of qualitative narratives. A score of 5 describes a high-performance employee, while 1 is an underperforming employee. Tracking performance with this measurable scale removes some subjectivity from evaluation.

4 best practices for performance appraisal

Performance appraisals are an art form. Here’s how your business can meet the mark every single time.

1. Train managers

Managers are at the forefront of performance appraisals, and training them to conduct them effectively should be mandatory. Great communication skills go a long way toward making performance reviews positive processes. 

2. Communicate with employees

Empowering employees starts with communication. Discuss why you want to conduct performance reviews, what to expect from the process, and how it benefits employees. This level of transparency helps employees understand that you’re invested in their success and want to find a rhythm for relaying feedback.  

3. Assess and improve the process

Even a performance appraisal can get reviewed. Assess existing methods and ask for employee feedback to improve processes. 

4. Use the right technology

The right performance management software goes a long way to improving performance appraisals. Intuitive and AI-powered talent management platforms like Workleap can streamline performance management. For managers, actionable feedback is always a click away, helping improve employee performance and keep engagement high. 

8 performance management goal examples to implement

Employees, from interns to executives, always have room to grow. Here are some major categories to set performance goals around for continuous improvement.

Collaboration

Setting employee goals around better collaboration enhances teamwork, driving success for an entire project or department. You might aim for an employee to achieve an 80% average on peer review evaluation for collaboration to boost an entire team’s productivity. 

Employee productivity

Employee productivity is a foundational pillar of performance appraisals. Determine a fair and consistent method to measure productivity to set goals with this metric. Some teams might have clearer outputs, like a set number of deliverables to complete or leads to generate.  

Financial employee performance

Individual performance could have a big impact on a company’s financial situation. For example, you could set a goal of maintaining productivity while decreasing resource expenditure by 2% over three months. 

Customer satisfaction and engagement

Customer satisfaction goal examples revolve around improving the customer experience. Come from a quantitative perspective, like reducing response time by 10%, or look to customer surveys like the Net Promoter Score (NPS) survey to better understand general sentiment. Request feedback after employee-customer interactions for more useful data here.

Professional development 

Goals related to professional development can range from taking on new opportunities or implementing innovative technologies. Ask employees to identify a learning program or new skill they’d like to focus on before the next appraisal.

Innovation and product development

Setting performance goals about innovation urges employees to consider new ways to improve an organization. New ideas can transform how a business works, and no one has better insight into potential improvements than the people doing the work. 

Leadership and management development

Sometimes employees shine when given the opportunity to get involved in leadership processes. Unlock a passion for leadership by identifying soft skill goals to set for employees.

IT security and data protection

Host employee phishing tests or general cybersecurity awareness drives, then make performance goals related to IT security. Planning around key results, like 100% of employees setting up MFA, aligns organizational goals with an improved cybersecurity posture.

Create a high-impact performance appraisal culture

Outdated performance review methods in the modern workplace hurt everyone, from the newest employees to the company’s bottom line. Leave annual reviews in the past and move forward with structured methods for continuous development. 

With options like flexible review cycles, 360-degree feedback reporting, and live analytics, Workleap Performance offers an all-in-one performance review system. Across a customizable review cycle builder, review forms, cycle lists, and automated performance review notifications, Workleap Performance will be there every step of the way.

Request a demo of Workleap Performance to see how your team can create a better review culture.