As June approaches many organisations will be preparing to conduct biannual performance appraisals. If your organisation does not yet have a process in place, you might want to start considering it now.

Creating and implementing a performance appraisal process is no easy task, yet it is one which can yield high rewards. The benefits of an effectively structured and administered performance appraisal process range from improving individual job performance to creating organisation-wide performance standards in line with company goals and vision.

Performance appraisals also provide an objective basis for many HR decisions, including confirming employees have the skills and attributes needed for the role, assessing training and development needs, and awarding merit pay increases and promotions.

The questions typically require a simple "yes" or "no" answer.

The first step is to decide which kind of performance appraisal system you will use in your organisation.  Some of the most popular are:

Goal setting or management by objective (MBO)

The employee and manager meet at the start of the appraisal period and agree a set of specific job goals or targets. An action plan is formed describing the steps towards achievement of these goals. At the end of the process, the employee and manager measure performance based on how many of the goals were met.

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Performance appraisals can yield high rewards.

This system is popular as it involves the employee throughout the appraisal process. Engaging the employee in formulating and agreeing goals usually results in a high level of commitment towards achieving these goals. This system supports alignment of the employee's regular work with organisational objectives.

It does, however, take considerable time and effort to build this system effectively. Supervisors and managers need to be trained in how to set specific, measurable and realistic objectives with employees.

Job rating checklist

This is the simplest method to use and could be a good option for organisations introducing performance appraisals for the first time.

Each evaluator is supplied with a list of prepared statements or questions that relate to specific aspects of job performance. The questions typically require a simple "yes" or "no" answer.  

This system is relatively simple to implement as it requires a minimum amount of paperwork for the evaluator. The downsides of this approach are that it offers only a very basic analysis of job performance and doesn't encourage evaluators to focus on improvement and development strategies. It is also not suited to jobs with frequently changing requirements.

Behaviourally anchored rating system (BARS)

BARS systems are designed to emphasise the behaviour, traits and skills needed to successfully perform a job. Typically the rating sheet has two columns. One column contains a rating scale marked in stages, eg "very poor" to "excellent", and the other column the "behaviour anchors". These are comments describing observed behaviours on which the rating is based.

This system is good for maintaining objectivity in the performance appraisal process as the specific nature of the statements reduces the potential for biased responses. It is also useful in identifying areas for development.

The disadvantage of this system is that it is complicated and time-consuming to develop. Its effectiveness depends on the accuracy and appropriateness of the anchor statements.

Whichever system you choose, success in implementing it will be largely dependent on involving both managers and employees early on in the process. Invite contributions on which specific skills, attributes, behaviours and goals should be the basis of performance criteria. You will also need to identify which procedures will be used to track and monitor behaviour.

While there is no one "right way" to determine what method will work best in your organisation, it is critical that you

communicate chosen methods to all staff. To achieve commitment to and cooperation with the system, make sure everyone has a clear understanding of how the program will work and their roles in securing its success.