Frequently Asked Questions

What do I do if my employee does not have a current job description?

If the review is coming up, use goals and other documentation that you have agreed to in the absence of a more formal job description. Either you or a human resource manager should then write a current job description to bring to the performance appraisal meeting, so that you can use that as a baseline from then on.

My employee has had some family problems recently and his performance has been suffering. How should I handle this?

While you can be sympathetic, you must discuss the issues with him honestly and openly. Explain that you understand he has been under a lot of pressure, but review job expectations. Discuss possible solutions together and help prioritize his work, so that performance expectations are very clear.

I'm the manager, yet I always get nervous before a formal performance appraisal. What should I do?

It is common to think of the performance appraisal as a confrontational or unpleasant event. Remember the purpose of the appraisal is to help support your employee and promote excellent performance. To help keep you focused, bring clear agenda notes and use the opening as a time to establish rapport with your employee.

Be aware of your biases

I'm going to tell you about a case on capital budgeting that I was teaching recently. The case had three projects that my students had to choose from. And there is a little calculation that goes before it and then they do the calculation and figure out which project they want to invest in. Forty-five minutes into the case discussion I took a vote, and one-third of the class wanted Project A, one-third wanted Project B, and one-third picked Project C. And we were like, let's step back and analyze the situation. How is it possible that they all read the same case, had the same data, same analysis, and came to three very different conclusions? And we talked a little bit about how each one of us made the choice.
What we realized that each of us in the classroom had done was we picked which project was our favorite, and then worked backwards on assumptions in our calculation so that that project finished in the top.
So I think that's very instructive on how we make our decisions as human beings. You might think we have a very elaborate objective system with numbers, quantitative data, and analysis, but at the end of the day, we all do it very subjectively. It's our likes and preferences that determine our actions, and the numbers might just be a tool that helps us.
Being aware of this cognitive bias—that even if you use numbers, it's subjective at the end of the day—is extremely important in performance evaluation. Because when we're evaluating people rather than projects, these personal biases that we have come even more to the fore. So that's the first thing that we have to recognize. It's all subjective even if you pretend it's objective.
The second thing to keep in mind about subjective performance evaluation is that we always have great inflation. People have a very difficult time giving negative feedback and therefore they like to say everyone is about average.
The solution to these problems it not to move toward something more objective, but in fact try to make subjective performance evaluation work, but try to educate all of us about our own cognitive biases. If we are aware that we do determine things subjectively and that end of the day we have to make a subjective performance evaluation work and not get too carried with great inflation, I think we'd have a much better performance-evaluation system.

Recognize your personal preferences when doing performance evaluations.

V.G. Narayanan
Professor, Harvard Business School
V.G. Narayanan is a professor at Harvard Business School, where he has taught Financial Reporting and Control, Measuring and Driving Corporate Performance, Management Control and Performance Measurement, and several executive education courses.
His current research is concerned with managerial accounting, including research on control issues in inter-organizational settings and the use of cost accounting and control systems in hospitals.
V.G. received his bachelor's in commerce from the University of Madras in 1988. He then received his MBA at IIM Ahmedabad in India. V.G. also has a Master of Science in statistics and Master of Arts in economics from Stanford University, as well as a Ph.D. in Business from Stanford's Graduate School of Business. V.G. is an Associate Member of the Institute of Chartered Accountants of India and a member of the American Accounting Association.

Evaluating the performance appraisal meeting

Consider your side of the meeting. Did you create an open climate? Did you listen carefully to what the employee said? Was your feedback clear and specific? What worked and what could be improved upon next time?

Compare your view with the feedback you collected at the end of your meeting. Determine what changes you can make for future meetings with that person and for future meetings in general.

How to follow up

After you have completed your performance appraisal, make sure both you and the employee have a copy of the development plan or a written record of next steps and commitments.

You should plan on following up after every appraisal meeting. High performers and satisfactory performers will likely need less follow-up. However, if you've given them new, more demanding goals, you'll want to monitor their progress and determine if they need additional training, coaching, or support.

Employees with performance gaps who have committed to development plans should be more carefully monitored. In most cases, monitoring takes the form of a follow-up meeting every few weeks or months. Your goal in these meetings is to check up on your employee's progress against his or her development plan, and provide coaching if necessary.

Check the notes and make a plan

Examining the notes from an appraisal meeting can help you craft a development plan for your employee.

Diane, a manager, met with Carl recently to appraise his performance. The meeting went well, with plenty of positive discussion.
Diane took notes. She wrote about his high performance as a project leader, his habit of  giving a lot of credit to his team members, his belief that the company "takes care" of him" and "gives him motivation to go above and beyond," and that he'd like to change the ways new projects are managed.
Judging from Diane's notes, what subject did she neglect to cover in the appraisal meeting with Carl?

 Reasons for Carl's high performance

 Next steps for Carl's development that he and Diane agreed on

 Issues or points of disagreement

Correct choice. Carl is a high performer with an interest in improving the way things are done in the company. Diane might have spent some time during the appraisal meeting discussing steps Carl could take to make even more of a contribution. 

Diane asks you to help her work on Carl's development plan. Given the content of her notes, what would you recommend as the best next step for Carl's development?

 Have Carl focus on leading established projects, since he seems uncomfortable with the way new projects are managed

 Continue having Carl lead both established and new projects, but ask him to work within the new-project management methods already established in the group

 Suggest that Carl review the company's process for handling new projects and propose improvements

Correct choice. Carl expressed interest in seeing changes in the new-product management methods. Reviewing the existing methods and proposing improvements would help keep him engaged and challenged in his position. It could also lead to valuable new ideas and processes for the company. 

Tim, a manager, has recently met with Marla to appraise her performance.
He took notes during the meeting.  He wrote that she is doing well as a programmer, that she has handled simple projects with little trouble, that she believes she is ready to do more complex programming, and that she might likes the idea of working on Sheila's new interactive project.
Judging from Tim's notes, what subject did he neglect to cover in the meeting?

 Reasons for Marla's high performance

 Marla's short-term career goals

 Possible opportunities for Marla in the company

Correct choice. Although Tim knows that Marla is doing well, he did not discuss with her the factors that contribute to her high performance. By specifying these factors, Tim could have helped Marla repeat and even improve on her good performance. 

Given what's written in the notes, what is the best next step for Tim to take with Marla?

 Complete Marla's development plan

 Ask Sheila if she has room for Marla on her project team

 See if Marla would be interested in training new employees

Correct choice. Tim needs to make sure that his idea for Marla's development—assigning her to Sheila's new project team—will work out in practical terms. 

Creating a development plan

A development plan is an important tool for addressing the skills and/or behaviors that are to be worked on in the future. If you have prepared a draft of this document in advance of the meeting, and time permits, you can discuss it toward the end of an appraisal session. Often both parties need more time or additional information and prefer to reconvene to develop the plan together as a follow-up item after the meeting.
In either case, you and your employee need to work together to reach agreement on a development plan. You must then seek commitment from your employee to achieve the goals of the plan. A thorough development plan includes:

• Timeline
• Action steps
• Expected outcomes
• Training required, if applicable
• Specific goals
• Feedback required
• Practice required

The development plan then becomes part of the employee's record.
Before concluding the meeting, it's appropriate to conduct a brief review of what was useful in the meeting and what was not. Also ask for suggestions for ways to do things differently in the future.

A successful appraisal meeting doesn't add up to much unless it provides the direct report with a plan for growth. What steps do you need to lay out to ensure your employee's ongoing development?

Taking notes

If you take notes during the meeting, state this up front and identify the purpose of the notetaking, such as, "Is it okay with you if I take some notes to document what we're discussing, so we can both remember what we've agreed to and our next steps?" If notetaking makes you or the employee uncomfortable, it's probably better just to summarize the meeting afterwards. Include in your notes or summary:

• The date
• Attendees
• Key points and phrases the employee used (not necessarily verbatim), including his self-appraisal
• Key points and phrases you used
• Issues or points of disagreement, if any
• Overview of the development plan
• Agreed-upon next steps

What's wrong with this feedback?

For feedback to be useful, it must meet some important criteria. See if you can identify the problems and shortcomings of each of the following appraiser comments. Some of the comments may be problem-free!

"Your sales numbers are in the gutter. You'll be out of here if that doesn't change."
What's wrong with this feedback?

 Not specific

 Negative and not specific

 Not action oriented and negative

"We're afraid things aren't working out with you the way we'd like. Let's work together to see if we can't get you back on track."
What's wrong with this feedback?

 Not specific and negative

 Negative

 Not action oriented and not specific

"The problem is, even though we see you are working hard, you're mis-spending a lot of energy by not following the right processes."
What's wrong with this feedback?

 Not specific

 Negative

 Not action oriented

Feedback sparks growth

When I think about developing others, I think it's almost like that old adage about when you're doing a presentation: Tell them what you're going to tell them, tell them, and then tell them what you told them.
So, when you're developing somebody, help them understand what their development opportunities are, give them the feedback so they know specifically what those development opportunities are, and then help them create a plan that helps them work on those development opportunities.
It's pretty straightforward, but not always easy to do. You've got to make sure that they can hear what you're telling them. When they can't, sometimes you have to take two or three different tacks until you get the right message across.
But really tell them what you're going to tell them, tell them, tell them what you told them, and then keep giving them feedback. Make sure you circle back with them and say, "This is how this particular assignment went," or "This is what I saw in this team meeting, this is what worked well, this is what you might try to do differently." So, just keep those lines of communication open because most people don't come to work and say, "You know what? Today I think I'm going to do a really bad job." They want to be successful — so help make them successful.
I had a leader many years ago, early on in my career when I was becoming a learning and development professional, who saw that I had potential. She knew what my development opportunities were, but she also knew that she could stretch me. I think I learned about developing others from her.
She gave me a stretch assignment and she told me, "Hey, this is going to be tough for you. This is not something you've done before. But, let's talk about what you're going to get out of this assignment. Let's talk about how I can help you, and let's talk about how often we are going to meet and talk about what's going on with that project."
Setting that framework up was very helpful for me. I ended up just knocking the ball out of the park on the project. She was delighted. I was delighted. The customer was delighted. It was a good thing, and it was one of the best lessons I learned from her.

Help your team members to be successful by giving stretch assignments and supporting them through the process.



Robin Jarvis
Senior Manager, Leadership Development, H-E-B Groceries
Robin Jarvis is the Senior Manager for the Leadership Development team at H-E-B, a Texas-based retail organization. Robin is responsible for the leadership development curricula, talent pipeline programs, H-E-B's assessment suite, and the internal scholarship program.
Robin joined H-E-B in 2008 after 9 years with Dell, where she held several roles in Human Resources including HR Generalist, Talent Acquisition Senior Manager, and multiple positions in Learning and Development.
She was also previously a Senior Performance Consultant in the Training and Development department at SEMATECH, Inc., where she was responsible for the development of a nationally recognized new-hire orientation program as well as the development of a global business skills curriculum.
Robin has a Bachelor of Arts in English and political science from Monmouth College.

Offering useful feedback

Identifying the root cause of performance gaps will, in most cases, create an atmosphere of objectivity in which both you and your direct report can contribute in positive ways. Your statements won't seem like attacks to your direct report; consequently, he or she won't be on the defensive. Instead, you'll be working together to address "the issue," which often lies outside the subordinate (e.g., lack of proper training, too few resources, the workplace environment in general). Some of the following strategies may help you offer more useful feedback:

• Encourage the employee to articulate points of disagreement
• Orient feedback toward problem-solving and action. To keep the ownership of the problem with the employee, give the employee the first opportunity to suggest a plan for eliminating the performance gap.
• Give feedback without the use of subjective, general attributes. Comments such as "You aren't a leader" or "You aren't committed" are not helpful.
• Avoid generalizations, such as "You just don't seem involved with your work," in favor of specific comments that relate to the job, such as "I have noticed that you haven't offered any suggestions at our service improvement meetings. Why is that?"
• Be selective in the data you choose to share. You don't need to recite every shortcoming or failing. Stick to the issues that really matter.
• Give authentic praise as well as meaningful criticism

Addressing a performance problem

Key Idea
Giving feedback to correct performance may seem difficult or uncomfortable. However, remember that you are working together as a team and feedback is a necessary part of improving performance.
To help clarify an issue, describe the "gap" between the employee's performance goal and actual performance. If possible, identify an organizational objective that explains why the problem must be resolved. Emphasize the importance of performance improvement in terms of the individual's career goals. People can and do change when they understand the consequences of their behaviors and work.
Make sure the employee affirms your statements and agrees on the importance of improving his or her performance. Then move the discussion toward identifying the root cause of substandard performance. Ask the person why he or she may not be achieving desired goals. Listen carefully for the response. If you don't receive a thoughtful reply, probe with other questions.

For example: "Could the problem be that you need more training?" or "Are there too many distractions in the office?"

Remember, you'll get the best results addressing performance problems if you are firm but non-threatening. There may be many legitimate reasons for performance problems.

Discussing performance problems with direct reports can be tough, especially for new managers. But it's vital to the direct report's development—and to the health of the company.

Discussing job performance

 Nothing is more terrible than activity without insight. 

–Thomas Carlyle

The purpose of a performance appraisal meeting is to encourage good performance or correct poor performance. In both cases, you need to base your job performance discussion on specific accomplishments compared to agreed-upon performance goals. Keep the focus on the performance and make sure not to personalize it. This is also a time to:

• Confirm that the employee understands what his or her responsibilities are and has the requisite skills and resources
• Discuss the coaching and training required to improve skills, motivation, and confidence
• Outline next steps. Spell out the specific actions you, the employee, or others will take and when. For positive performance, consider what actions can help sustain or strengthen the performance. For poor performance, identify actions that can help lead to improvement. Seek agreement and commitment from the employee. Toward the end of the meeting, establish the time and goals for your next follow-up meeting.

Getting off to a good start

People tend to be anxious when approaching performance appraisal meetings, so it is key that you set the tone of partnership right in the beginning. Start out with a review of the purpose and objectives of the performance appraisal and note its positive benefits for both parties. This psychologically prepares you and the employee, and it acts as a "warm-up" for open dialogue.

Then ask the employee to talk about his or her self-appraisal. This helps you understand the employee's point of view and prevents you from controlling too much of the conversation early on. Listen very carefully to what the person is saying, and don't interrupt until the person has had his or her say. Demonstrate that you are listening by repeating what you've heard.

For example, you might say: "If I understand you correctly, you feel that you are meeting all goals with respect to the weekly sales reports, but that you are struggling to contact all the key customers you've been assigned. Do I have that right?"

Get ready for an appraisal meeting

Preparation can help you conduct a performance appraisal meeting effectively. What steps should you take to prepare?

A year ago, Jeff became one of your direct reports in the accounting department. In the coming month, you will conduct his twice-a-year performance appraisal. Jeff came highly recommended for his job, and he has eight years of experience in finance. However, his performance in the job has not met your expectations. You want to look into possible explanations for his underperformance before the appraisal meeting.
Which of the factors below is not a likely explanation for Jeff's underperformance?

 Low motivation

 Inadequate assistance and resources

 Lack of skills or experience

Correct choice. You have enough information about Jeff's career background to rule out inadequate skills or experience as a cause for his underperformance. 

To continue exploring possible reasons for Jeff's underperformance, you review his self-assessment. Each employee completes a self-assessment one month before his or her performance appraisal meeting. In Jeff's self-assessment, he wrote that he often feels unsure about the correct procedures to follow in his job.
Given this information, what would be a good next step for exploring reasons for Jeff's underperformance?

 Compare Jeff's performance against that of his colleagues in the rest of the accounting department

 Ask Jeff to file additional weekly self-reports between now and his performance appraisal

 Compare Jeff's performance against people who joined his department at roughly the same time

Correct choice. If Jeff is unclear about the procedures he should follow in his job, there may be a training problem in his department. Comparing his performance against people who joined his department at about the same time might be instructive. If they are all underperforming to varying degrees, then the problem could be training. 

You investigate how Jeff's performance holds up against that of the three other people who joined the accounting department at roughly the same time. You discover that performance among the members of this group is generally lower than among employees who were hired at different times. Moreover, many of these underperforming employees report that they are having problems understanding processes and procedures.
Given this information, which item would be most useful to bring to Jeff's performance appraisal meeting?

 The training manual used for new members of the accounting department

 Performance records of direct reports who previously held Jeff's position

 Copies of the other employees' self-assessments indicating their difficulty understanding processes and procedures

Correct choice. Reviewing the training manual with Jeff might reveal that there are disparities between what's in the manual and how procedures and processes are actually carried out in the department.

Materials to develop and bring to the meeting

To support your conversation with your employee, you need to bring the following documents to the meeting:

• Completed performance appraisal form in your company's format
• Copy of the job description
• Employee's goals for the appraisal period
• Any documentation that supports your appraisal

Documenting employee performance

It is important to record your observations and discussions as factually as possible. There are special legal considerations when documenting employee performance, so consult your human resources manager or internal legal team. If you don't have such a resource in your organization, you could consult a lawyer who specializes in employment law. This is especially advisable when an employee's performance is beginning to suffer or if you are planning to terminate an employee.

When documenting employee performance (positive or negative), include the following:

• Date
• What you observed
• Supporting data (reports, other people's feedback)
• Impact on your team and organization

Do not trust your memory; write it down. Keep the tone in your documents neutral and do not include anything that you would not be comfortable testifying to in a witness chair. Be especially careful to avoid using characterizations.

Evaluating your employee's performance

Key Idea

When you review your employee's performance, remember to give equal time to good performance as well as to performance problems. You are looking for specific examples that can be supported with documentation and that are worthy of discussion in your performance appraisal. In some cases, your performance appraisal involves a general rating of the employee's performance. Refer to your company's guidelines on rating overall performance.

For good or superior performance, make sure you know what specific details support the claim. The more specific the feedback, the more likely the employee can repeat and improve upon the behaviors.

For performance that needs improvement, try to identify the cause-and-effect links between the employee's behavior and attitudes and performance. Also ask yourself how you may have contributed to or interfered with your employee's performance. Consider some of the following factors that could be a supervisory responsibility: unclear expectations and/or direction, inadequate assistance and resources, lack of skills or experience to do the job, low motivation, low self-confidence.

Evaluating direct reports is a tough job. How will you further enhance high performance—while addressing areas needing improvement?

Preparing for a performance appraisal meeting : Completing the picture

Evaluating your employee's performance involves reviewing multiple sources to gather as complete a picture of the employee's performance as possible. Your review should include the following documentation:

• The job requirements
• The employee's own performance goals
• Your criteria for successful performance
• The employee's history, including skills, past training, and past job performance
• Your documentation of performance observations and other relevant data
• Self-reporting by the employee
• If possible, 360-degree feedback—feedback from a full circle of the people who interact with the individual, which could include customers, peers, and the employee's direct reports

Your employee's role in the performance appraisal process

 The skill to do comes from the doing. 

–Cicero

Performance appraisals are an opportunity for you and your employee to sit down together to work on performance goals and issues. As a manager, think of the review process as a partnership with your employee. It is important to involve your employee in every stage of the appraisal process, so that you can see both sides of the story. This includes having your employee complete a self-appraisal.

In this self-appraisal, the employee evaluates his or her own performance against goals, and often also identifies factors that hindered or supported performance. The employee may summarize his or her achievements, and resources needed for past and future development. The format can vary, from a formal, written self-appraisal to an informal "jot down some notes" kind of process. The important element is getting the employee's perspective. Involving your employee in the process is also beneficial for the following reasons:

• It sets the tone of partnership for all reviews, both formal and informal.
• It reduces negative reactions to feedback.
• It promotes a trusting relationship between you and your employee.

Importance of formal performance appraisals

Key Idea

Performance appraisals are an important tool in managing performance. They help you gain insight into how your employees are performing in their jobs. They are also important for these reasons:

• They communicate challenging yet realistic goals to your direct reports, so these goals can be achieved.
• They can increase productivity by providing timely feedback to employees.
• They help the organization make valid decisions with respect to pay, development, and promotions.
• They provide protection against legal suits by employees who have been terminated, demoted, or denied a merit increase.

Performance appraisals should be more than just a pat on the back or a warning. They are powerful tools you can use to develop your direct reports.

Cumulative conversations

One of the problems in most organizations is that performance appraisals are thought of as this horrible thing that happens once a year. They're 60 minutes, or 90 minutes. It's agony. You go in as an employee, and you don't know what's going to happen. As a manager, you've spent two hours the night before trying to think about things to say. You've filled out the form. There hasn't been any interaction. And largely, the activity is being done to drive the pay process, not as part of the ongoing development and thought about a person's value in the organization.

In fact, the performance appraisal should simply be the culmination, the documentation, and the final conversation in a yearlong set of what don't have to be big conversations, but small conversations about how somebody's doing, and how they can improve their performance, strengthen their performance, get better at things, and develop themselves, so that the conversation at the end of the year — whenever the end of that year is — is simply, "Lets remind ourselves of all the things we talked about this year." No surprises.

I'm also not a fan, I have to say, of the manager going out to the employee and saying, "Do your own performance appraisal. Give it to me, and then I'll edit it." I think that is a manager not stepping up to their responsibility. It ought to be a joint process. It ought to be two people talking to each other over the course of the year. And you can say, "I'm a manager. I'm busy. I don't have time. I have 15 employees, or 20 employees. I don't have time to sit down with them all for an hour a month."

It doesn't have to be an hour a month. It could be 10-minute conversations that are targeted and purposeful. They can be things as simple as, "You did a great job on Project X. I particularly liked the way that you handled the vendors on this project." It can be something as simple as, "You know that presentation would have been even more effective if you used fewer slides. Next time, I'd be happy to go over your slides with you, if that would be useful."

Those are performance coaching conversations. And as long as they get documented someplace, that's what makes up the substance of the performance appraisal. And it makes it very easy to then think about development for the coming year, and the way in which that performance appraisal is going to play out and be of use to people, rather than painful.

Targeted, purposeful mini-conversations often build to the best reviews.

What is assessing performance?

Assessing performance is the formal review process you use to evaluate and support employee performance. It is part of a system of performance management that is based on goals you and your employees set together.

Through periodic informal reviews, you have an opportunity to see how well employees are performing relative to their goals and to provide opportunities for early intervention.

Formal performance appraisals are conducted at least once a year. This process helps the employee and the manager focus on the formal goals and performance expectations that can impact salary, merit increases, or promotions. Appraisal sessions are both a confirmation and a formalization of the ongoing feedback that should be part of every manager's relationship with his or her employees. As such, performance appraisals should never contain any surprises.

Topic Objectives

This topic contains relevant information on how to:

• Use informal performance assessments and feedback as part of your regular interactions with your employees
• Prepare for a formal performance meeting with a direct report
• Document a performance meeting
• Create a development plan with the employee

What Would You Do?

What would you do?
Doug began the performance appraisal by complimenting Alex on his outstanding client management skills. "Our best clients are singing your praises," he said. Then Doug gave Alex some positive feedback on his ability to stay within budget and meet deadlines. "You've really hit the right notes on these aspects of your job," he said to Alex. Alex grinned. Seeing Alex's response reassured Doug that he could comfortably move on to a more problematic area—the poor execution of his monthly reports. Doug explained that the reports were important documents used by other people in the company. Alex was surprised. He said if he had known how important they were, he would have spent more time on them. As the meeting ended, Doug sensed that Alex seemed to feel unfairly criticized. Doug wondered why and what he should do differently.
What would you do?
In preparation for the performance appraisal meeting, Doug might have considered why there was a problem with Alex's monthly reports and how he might have contributed to the problem. Had he provided Alex with clear direction and set appropriate expectations? When the meeting took place, Doug might have offered to help Alex on his next batch of monthly reports to show him how they could be improved. Finally, as the meeting drew to a close, Doug might have asked Alex for his suggestions on ways to do things differently in the future.
In this topic, you'll learn how to prepare for the appraisal process, give positive and negative feedback, track goals and progress, and help people develop their own career goals.

One of your most sensitive duties as a manager is conducting performance appraisals. How do you balance constructive criticism with praise and help your direct reports develop?