By Robin Thomas, J.D.

Most employees want and need constructive feedback on how
they are doing. So, a performance evaluation system can and should be an
effective retention tool. Unfortunately, though, most supervisors dread doing
appraisals. This discomfort stems from at least two factors. First, evaluations
require them to communicate personal judgments. Second, the process can be time
consuming, especially if they only do annual reviews that force them to recall
and catalogue a whole year’s worth of experiences.

Many HR experts agree that this “once-a-year” approach
doesn’t work because the resulting appraisal tends to focus on extraordinary
events or to rehash past problems that should already have been addressed. Instead,
employees need regular, ongoing evaluations and structured guidance to set and
achieve both job and career goals. To get the most out of your appraisal
process, you should incorporate four elements into your program and train
supervisors to steer clear of eight common mistakes that can undermine

Combine four factors to make an effective program

For a performance appraisal system to work, it should be
designed to give employees clear goals and to rate their progress objectively. The
most successful programs typically combine the following four elements:

  1. Regular,
    informal feedback from supervisors. Annual evaluations aren’t enough. Employees
    need regular input that focuses on day-to-day performance objectives
    rather than concentrating on past mistakes or failures.
  2. Performance
    goals set jointly by employees and supervisors. Goals may be both
    short-term and long-term and can cover a wide variety of objectives,
    depending on the employee’s current job responsibilities and future aspirations.
    Goals should be precise and quantifiable where possible, such as the
    completion of a specific project within a set period of time. To help
    employees meet their goals, supervisors should provide additional training
    or other necessary support.
  3. Action
    plans to address performance or disciplinary problems. Action plans can
    help when an employee is experiencing performance problems. The supervisor
    should identify and discuss problems with the employee as they occur and
    develop a plan of action for improvement. The employee also should have
    input and be able to suggest changes to the plan. Once agreed upon, the
    plan should be reviewed regularly to make sure the employee is progressing
  4. Formal
    reviews that accurately document the “big picture.” Ideally, these formal
    reviews should be done several times a year. But, if you regularly conduct
    informal meetings to discuss performance, a semi-annual or even annual
    review may be sufficient. However, formal reviews generally should not be
    used to deal with ongoing performance problems. The employee should have
    been alerted to these during informal discussions and already be following
    an action plan to correct them. Instead, the purpose of formal meetings is
    to assess whether goals and action plans have been met and to determine if
    the employee is on track for career development.

Train to avoid the eight “deadly sins” of evaluations

Manager training on effective and consistent evaluations is
essential, since both managers and employees often are uncomfortable discussing
performance. You should train your supervisors not to make the following eight
common errors that can distort and even invalidate the evaluation process. Specifically,
supervisors should not:

  1. Base
    the evaluation on the employee’s most recent behavior, instead of
    reviewing the whole performance period;
  2. Allow
    irrelevant or nonjob-related factors to
    influence the evaluation, such as physical appearance, social standing,
    participation in employee assistance programs, or use of leaves of absence;
  3. Include
    only favorable remarks on the evaluation, even when negative comments are
    justified and appropriate;
  4. Rate
    all subordinates at about the same point on a ranking scale, usually in
    the middle;
  5. Allow
    one characteristic of the employee or one aspect of the job performance to
    distort the rest of the rating process;
  6. Judge
    all employees at the extremes, either too leniently or too strictly;
  7. Allow
    one very good or very bad rating to affect all the other ratings of the
    employee (the “halo effect”); or
  8. Permit
    personal bias to unduly influence the evaluation process.

Foster positive attitudes about appraisals

Performance evaluations don’t have to be painful or
unpleasant if approached systematically. In fact, when done properly, they are
effective planning tools for managers and provide important feedback to
employees. The first step in a successful program is to train your supervisors
and show your organization’s commitment to conducting effective appraisals. Next,
hold your supervisors accountable for their ability to provide meaningful
evaluations and ongoing guidance to their employees. And finally, encourage
supervisors to involve employees directly in the formulation of goals and
action plans. This disciplined, interactive approach can help eliminate the
natural barriers to effective evaluations.

Robin Thomas, J.D., is
Managing Editor for Personnel Policy Service, Inc., 159 St. Matthews Avenue,
Suite 5, Louisville, KY 40207, and can be reached at,
or 1-800-437-3735. Personnel Policy Service markets group legal benefit
services and publishes HR information products, including a model Performance
Appraisals policy available at