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Are your organization's "annual" appraisals done even less frequently because no one likes doing them? You may be missing an opportunity to improve employee relations and productivity.

A performance evaluation system can be an effective retention tool, since most employees want and need constructive feedback on how they are doing. Unfortunately, the majority of supervisors dread doing appraisals. The process requires communicating personal judgments and is time consuming, especially if supervisors do only annual reviews that force them to recall and catalogue a year's worth of experiences. Many HR experts agree that this "once-a-year" approach to performance evaluations doesn't work since it tends to focus the appraisals on extraordinary events or to rehash past problems that should have been addressed already. Instead, employees need regular, ongoing evaluations and structured guidance to help them set and achieve both job and career goals. The following practice tips outline the four elements of an effective appraisal system and warn against the eight common mistakes supervisors make that can undermine the program.

Four Factors Combine to Make Program Effective

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

• Regular, informal feedback from supervisors. Once-a-year evaluations aren't enough. Employees should receive regular input from their supervisors. These discussions typically focus on day-to-day performance objectives rather than concentrating on the employee's past mistakes or failures. This approach requires supervisors to observe and evaluate their employees regularly and to work closely with individual employees as needed.

• Performance goals set 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. Identified core competencies should be used to determine future performance goals. Goals should be specific 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 offer additional training or other necessary support. New performance goals should be recorded, reviewed regularly, and modified as needed.

• Action plans to address performance or disciplinary problems. Action plans can be helpful when an employee is experiencing performance problems that need correction. The supervisor should identify and discuss the problems with the employee as they occur and suggest a course of action that may improve performance. The plan should detail the nature of the problem, the steps that both the employee and the supervisor will take to help solve the problem, and the time within which the plan will be implemented. The employee should have input on the plan and suggest changes. Once a plan has been agreed upon, it should be reviewed regularly to make sure the employee is able to implement it successfully.

• Formal reviews that accurately document the "big picture." Ideally, these formal reviews should be done several times a year, although if informal meetings are conducted regularly, you may be able to get away with an annual or semi-annual review. Generally, they should not be used to deal with ongoing performance problems. The employee should have been alerted to these during the informal discussions and should be following an action plan to correct them. Instead, the purpose of these meetings is to assess whether goals and any action plan have been met and to determine if the employee is following the right path for career development.

Train to Avoid the Eight "Deadly Sins" of Evaluations

Training managers to perform effective and consistent evaluations is essential, since both managers and employees often are uncomfortable discussing performance. The training should include warning supervisors to refrain from the following eight common errors that can distort and even invalidate the evaluation process: 

1. Basing the evaluation on the employee's most recent behavior, instead of evaluating the whole performance period;

2. Allowing irrelevant or nonjob-related factors to influence the evaluation, such as physical appearance, social standing, participation in employee assistance programs, or excused time off for leaves of absence;

3. Failing to include unfavorable comments on the evaluation, even when justified;

4. Rating all subordinates at about the same point on a ranking scale, usually in the middle;

5. Allowing one characteristic of the employee or aspect of the job performance to distort the rest of the rating process; 

6 Judging all employees too leniently or too strictly; 

7. Allowing one very good or very bad rating to affect all the other ratings of the employee (the "halo effect"); and

8. Permitting personal feelings to bias 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 can be effective planning tools for managers and provide important feedback to employees. The first step is to show your organization's commitment to conducting appraisals by providing training to supervisors. Next, supervisors should be held accountable for their ability to provide ongoing guidance to their employees. And finally, supervisors should involve employees directly in the formulation of goals and action plans. This disciplined, interactive approach can help eliminate the natural barriers to effective evaluations.

This article is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice.

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