This document provides guidance on conducting effective performance appraisals. It discusses the aims of regular performance appraisals such as checking that employee and employer needs are being met and fostering cooperation. Different methods for evaluating performance are described, such as peer reviews and self-evaluations. The "golden cycle" of performance management involving goal setting, feedback, and rewards is also outlined. Potential problems with performance appraisals like bias and halo effects are examined. Best practices for performance appraisal interviews and documentation are recommended. The document concludes with a summary and questions.

1. How to conduct effective performance appraisals by Toronto Training and HR April 2011

2. Contents 3-4 Introduction to Toronto Training and HR 5-6 Definition 7-8 Drill A9-15 Aims of regular performance appraisals 16-19 Case studies A & B 20-21 Goals and standards for performance22-23 Designing a performance appraisal system24-27 Different methods to evaluate performance28-29 Golden cycle of performance management30-31 Types of performance appraisal32-34 Problems with performance appraisal35-36 Areas to improve; collaborate don’t assassinate37-39 The performance appraisal interview 40-41 Drill B 42-46 Points to bear in mind47-50 Case studies C & D51-52 Conclusion and questionsPage 2

3. Page 3Introduction

4. Page 4Introduction to Toronto Training and HRToronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden 10 years in banking10 years in training and human resourcesFreelance practitioner since 2006The core services provided by Toronto Training and HR are:Training course design

5. Training course delivery- Reducing costsSaving time

6. Improving employee engagement & morale

7. Services for job seekersPage 5Definition

8. Differences betweenPerformance Appraisal and Performance ManagementPerformance Appraisal:Setting work standards, assessing performance, and providing feedback to employees to motivate, correct, and continue their performance.Performance Management:An integrated approach to ensuring that an employee’s performance supports and contributes to the organization’s strategic aims.Page 6

9. Page 7Drill A

10. Page 8Drill A

11. Page 9Aims of regular performance appraisals

12. Page 10Aims of regular performance appraisals 1 of 6Check that the needs of the employee and employer are being metConfirm the employee’s understanding of company expectationsIncrease the employee’s knowledge of his or her personal strengthsProvide an opportunity to discuss areas for improvementFoster a spirit of co-operation and teamwork

13. Page 11Aims of regular performance appraisals 2 of 6WHAT CAN THEY ACHIEVEperformance measurement - transparent, short, medium and long term clarifying, defining, redefining priorities & objectives motivation through agreeing helpful aims and targets

14. Page 12Aims of regular performance appraisals 3 of 6WHAT CAN THEY ACHIEVEmotivation though achievement and feedback training needs and learning desires - assessment and agreement identification of personal strengths and direction - including unused hidden strengths career and succession planning - personal and organizational team roles clarification and team building

15. Page 13Aims of regular performance appraisals 4 of 6WHAT CAN THEY ACHIEVEorganizational training needs assessment and analysis appraisee and manager mutual awareness, understanding and relationship resolving confusions and misunderstandings reinforcing and cascading organizational philosophies, values, aims, strategies, priorities, etc

16. Page 14Aims of regular performance appraisals 5 of 6WHAT CAN THEY ACHIEVEdelegation, additional responsibilities, employee growth and development counselling and feedback manager development - all good managers should be able to conduct appraisals well - it's a fundamental process

17. Aims of regular performance appraisals 6 of 6Satisfactory—PromotableSatisfactory—Not PromotableOutcomes of Appraisal InterviewsUnsatisfactory—CorrectableUnsatisfactory—UncorrectablePage 15

18. Page 16Case study A

19. Page 17Case study A

20. Page 18Case study B

21. Page 19Case study B

22. Page 20Goals and standards for performance

23. Guidelines for Effective Goal SettingAssign Specific GoalsEncourage ParticipationAssign Measurable GoalsAssign Challenging but Doable GoalsGoals and standards for performancePage 21

24. Page 22Designing a performance appraisal system

25. Page 23Designing a performance appraisal systemGaining support for the systemChoosing an appropriate rating instrumentSelecting ratersDetermining timingEnsuring fairness

26. Page 24Different methods to evaluate performance

27. Page 25Different methods to evaluate performance 1 of 3Peer reviewsSelf evaluationUpward appraisals

28. Page 26Different methods to evaluate performance 2 of 3TYPES OF PERFORMANCE APPRAISALFormal annual performance appraisals Probationary reviews Informal one-to-one review discussions Counselling meetings Observation on the job Skill- or job-related tests Assignment or task followed by review, including secondments (temporary job cover or transfer)

29. Page 27Different methods to evaluate performance 3 of 3TYPES OF PERFORMANCE APPRAISALAssessment centres, including observed group exercises, tests presentations, etc. Survey of opinion of others who have dealings with the individual Psychometric tests and other behaviouralassessments Graphology (handwriting analysis)

30. Page 28Golden cycle of performance management

31. Page 29Golden cycle of performance managementGoal setting and planningOngoing feedback and coachingAppraisal and reward

32. Page 30Types of performance appraisal

33. Page 31Types of performance appraisalGraphic rating scaleBARS( Behaviourally Anchored Rating Scales)Alternation rankingForced distribution methodCritical incident method Narrative FormsPaired comparisonMBO (Management by Objectives)

34. Page 32Problems with performance appraisal

35. Page 33Problems with performance appraisal 1 of 2Unclear standardsHalo effectCentral tendencyLeniency or strictnessBiasHorns EffectRecency ErrorFirst ImpressionFixed Impression

36. How to Avoid Appraisal ProblemsKnow ProblemsControl Outside InfluencesUse the Right ToolTrain SupervisorsKeep a DiaryProblems with performance appraisal 2 of 2Page 34

37. Page 35Areas to improve; collaborate don’t assassinate

38. Page 36Areas to improve; collaborate don’t assassinateEmphasize the positive with the negativeCouch your criticism in terms of the shared greater good rather than framing it as a personal indictmentEnlist your employee as an ally in troubleshooting a vexing issueOffer the employee flexible options in resolving a shortcoming

39. Page 37The performance appraisal interview

40. Page 38The performance appraisal interview 1 of 2How to conduct the interviewChecklistHow to handle a defensive appraiseeHow to constructively criticize the appraiseeHow to ensure the interview leads to improved performanceHow to handle a formal written warning

41. Page 39The performance appraisal interview 2 of 2GIVING NEGATIVE FEEDBACKWhy candour is importantThe importance of documentationThe importance of the correct wordingEncouraging employee feedbackEnding on a positive note

42. Page 40Drill B

43. Page 41Drill B

44. Page 42Points to bear in mind

45. Page 43Points to bear in mind 1 of 4Reduce surprisesLook back before you look aheadKnow the effects of documentationAvoid extremesGet employees involvedSeparate performance and pay increase discussionsKnow how to use the performance review for disciplinary purposes

46. Page 44Points to bear in mind 2 of 4SELF-EVALUATIONAddress your overall performance/track record for the review periodIn what areas do you need additional support, structure and direction?What are your goals for the next year or next review period?

47. Page 45Points to bear in mind 3 of 4WATCH YOUR LANGUAGEAvoid discriminatory referencesAvoid the term “attitude”Use “for example” frequentlyDocument how the supervisor has tried to help the employee meet performance standards

48. Page 46Points to bear in mind 4 of 4REVIEW TIMELINEOne month beforeTwo weeks beforeOne week beforeOn the dayThree to five days after the review

49. Page 47Case study C

50. Page 48Case study C

51. Page 49Case study D

52. Page 50Case study D

53. Conclusion & Questions

54. Page 52ConclusionSummaryQuestions