1. Method Name

Performance Appraisal Reviews

2. Alternative Names

Performance Review, Evaluation Interview, Annual Evaluation

3. Brief Description

It is a formal process in which a manager and an employee jointly evaluate the employee's job performance over a specific period (typically a year). The discussion covers achievements, strengths, areas for improvement, and setting goals for the next period.

4. Purpose / When to Use

It is used to evaluate performance, provide formal feedback, make decisions regarding compensation and promotions, and align individual goals with the company's strategic objectives.

5. Procedure / How to Apply It

1. Preparation: Both the manager and the employee prepare for the meeting. The employee often completes a self-assessment. The manager gathers data and specific examples of behavior and results.
2. Discussion: During the meeting, the following topics are discussed
: - Achievement of goals from the previous period.
- Strengths and successes.
- Areas for improvement (with specific examples).
- Overall evaluation (often on a numerical scale).
3. Goal Setting: SMART goals for the next period are set jointly.
4. Development Plan: Development and training needs and plans are discussed.
5. Minutes: The results are formally recorded in the evaluation form.

6. A Real-World Example

At the end of the year, the manager meets with the sales representative. They review the sales representative’s results against the established plan (goal). The manager will praise his excellent results in acquiring new clients (a strength), but will also provide feedback that he needs to improve his administrative work and ensure timely data entry into the CRM (an area for improvement).

7. Benefits

- It provides a structured and formal framework for feedback.
- It ensures that performance is evaluated at least once in a while.
- It serves as the basis for decisions regarding compensation and career advancement.

8. Risks / Limits

- Often perceived as a bureaucratic and demotivating ritual
.- If it takes place only once a year, the feedback comes too late
.- Subjectivity and biases on the part of the manager.
- It causes stress and uncertainty
.- The traditional model is often being replaced by continuous performance management (regular one-on-ones and feedback).

9. Practical Tips

- No surprises! The performance review should simply be a summary of the feedback the employee has received on an ongoing basis throughout the year
.- Focus on the future, not just the past.
- Separate the discussion about salary from the discussion about development, if possible
.- Ask for feedback on yourself as well.