Your annual performance grade is something that sticks with you. It can overwhelm the whole process. But it is not the most important part of the process and indeed performance appraisal can work perfectly well without one.
If you are not looking to use the appraisal as a link to pay then consider long and hard whether you need this one line/number summary of the year. We find it distracts the appraisal meeting and distracts the appraisal project itself – heavily influencing how objectives, values and 360s are designed and completed.
If you do need the grade (and most of our clients do) then let's consider our options.
Commonly we see two sorts of grade; a numeric grade (e.g. 1, 2, 3, 4) or a narrative grade (e.g. Strong performer, Competent, Development required). What we see less commonality on is how this grade is determined.
End of the form grade
Still the most common, there is a simple drop down box of options that the manager selects from.
Calculated average
Seemingly growing in popularity, we see grades calculated from other ratings on the annual performance review form, or built from grades in interim reviews across the year. The most common is to grade how objectives have been completed.
Suggested calculated average with override
A late entrant, but increasingly a request, is to calculate an average within the system and then give an option for the manager to override the calculation - normally with a forced narrative option to explain the discrepancy.
Forced distribution
All of the above options can be subject to a forced distribution (e.g. 20% of people will be an A, 40% will be a B, etc.). Some form of scoring drives this distribution which can be across the whole organisation or across departments.
360 degree feedback influenced
From scoring on 360 feedback, the annual performance review grade or evaluation is influenced or calculated. Take great care with this option.
I have to say our view is not set in stone here. In an ideal world I suspect we would avoid the annual grade - it can be distracting and it can be more controversial than it is useful. But, if you are going to run performance related pay (a debate in itself) then a grade is likely to form an element of the review process. I believe then that having followed a sensible process, managerial discretion is required on the grading. Whether that is assisted - through averaging - isn't actually that important.
With such an important topic area, training is the key to ensuring the managers are able to apply the chosen process in a fair manner and in a way that achieves the performance appraisal process objectives. Managers will need training and role playing that ensures that the gradings being presented are even across the organisation. This training can of course be included in training on how to handle the appraisal meeting.
The above is an excerpt from our performance appraisal white paper.
Brendan
If you are not looking to use the appraisal as a link to pay then consider long and hard whether you need this one line/number summary of the year. We find it distracts the appraisal meeting and distracts the appraisal project itself – heavily influencing how objectives, values and 360s are designed and completed.
If you do need the grade (and most of our clients do) then let's consider our options.
Commonly we see two sorts of grade; a numeric grade (e.g. 1, 2, 3, 4) or a narrative grade (e.g. Strong performer, Competent, Development required). What we see less commonality on is how this grade is determined.
End of the form grade
Still the most common, there is a simple drop down box of options that the manager selects from.
Calculated average
Seemingly growing in popularity, we see grades calculated from other ratings on the annual performance review form, or built from grades in interim reviews across the year. The most common is to grade how objectives have been completed.
Suggested calculated average with override
A late entrant, but increasingly a request, is to calculate an average within the system and then give an option for the manager to override the calculation - normally with a forced narrative option to explain the discrepancy.
Forced distribution
All of the above options can be subject to a forced distribution (e.g. 20% of people will be an A, 40% will be a B, etc.). Some form of scoring drives this distribution which can be across the whole organisation or across departments.
360 degree feedback influenced
From scoring on 360 feedback, the annual performance review grade or evaluation is influenced or calculated. Take great care with this option.
I have to say our view is not set in stone here. In an ideal world I suspect we would avoid the annual grade - it can be distracting and it can be more controversial than it is useful. But, if you are going to run performance related pay (a debate in itself) then a grade is likely to form an element of the review process. I believe then that having followed a sensible process, managerial discretion is required on the grading. Whether that is assisted - through averaging - isn't actually that important.
With such an important topic area, training is the key to ensuring the managers are able to apply the chosen process in a fair manner and in a way that achieves the performance appraisal process objectives. Managers will need training and role playing that ensures that the gradings being presented are even across the organisation. This training can of course be included in training on how to handle the appraisal meeting.
The above is an excerpt from our performance appraisal white paper.
Brendan
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