What is a performance appraisal?

In the simplest terms, a performance appraisal is a way of evaluating your employees to make sure they are performing their jobs to their best ability and helping your company achieve its goals. Most companies perform performance appraisals on an annual basis, with some opting to take it a step further by doing it semi-annually or even quarterly. The discipline of performance management is dedicated to the creation and facilitation of performance appraisals.

First, it’s important to make sure your employees have goals to reach that go beyond their job description. They should strive for growth during their employment, and your role as an employer is to help empower that growth. In addition to evaluating your employees’ progress toward reaching their goals, you should consult their job description. The employee should be performing their job at least according to the duties spelled out in their contract. Finally, you should gather input from the employee’s colleagues and managers to get their impression on the employee’s performance.

Once you’ve gathered all of this information, it’s time to put it into writing and formally go over everything with the employee at an agreed-upon time. It is at this point that you can share the results of your information gathering–what they’re doing right, what needs improvement, and any next steps the employee needs to take. It’s also when employees may ask for a promotion or raise based on your findings, so be prepared to negotiate this request if and when it comes.

Performance appraisal methods

Companies use a variety of performance appraisal methods to evaluate employees, and the outcome of these appraisals can vary depending on the employee’s performance. If they are performing above expectations, they make request a raise or promotion. If they are performing below expectations, you may put them on a performance improvement plan. Different performance appraisal methods yield very different results, so choose appropriately.

In self-assessments, employees take on the responsibility of evaluating themselves and discuss the findings with management. The benefit of self-assessment is that you’ll get candid, honest answers from most employees. The drawback is that employees may not have realistic views of their performance and inflate their accomplishments.

There are also peer assessments, where the onus to evaluate an employee falls entirely on their coworkers. The benefit of peer assessments is that you’ll get opinions on the employee from people who interact with them most often, and thus get a clearer sense of how they’re performing. The drawback of peer assessments is that you run the risk of the assessment process becoming a popularity contest and well-liked (but under-performing) employees out-scoring those who perform quite well but may not be as extroverted or social.

The most common approach is called the 360° feedback assessment, where supervisors, colleagues, and the employee themself all play a role in the evaluation. The benefit of the 360° feedback assessment is that you get a range of feedback on the employee from people at different levels in your organization, which allows you to get a fuller sense of their contributions not just to their individual day-to-day life, but that of others who rely on them. The only real drawback to this approach is that it takes time and deliberation to do properly. You must commit to involving the right people, otherwise, you waste time and effort on an incomplete assessment that could potentially hamper the employee’s growth.

Performance appraisal template

No two businesses are exactly alike, and the nature of your operations can make the use of a template difficult in every circumstance, but there are a few things that nearly all performance review methods have in common. You’ll find these in the template below.

Name of employee:
Current position:
Department:
Supervisor:
Date of last performance review:
Date of current performance review:

[Objective 1]: [choose one: needs improvement, meets expectations, exceeds expectations] + comments

[Objective 2]: [choose one: needs improvement, meets expectations, exceeds expectations] + comments

[Objective 3]: [choose one: needs improvement, meets expectations, exceeds expectations] + comments

[Objective 4]: [choose one: needs improvement, meets expectations, exceeds expectations] + comments

[Objective 5]: [choose one: needs improvement, meets expectations, exceeds expectations] + comments

Overall performance: [choose one: needs improvement, meets expectations, exceeds expectations]

Notable achievements:

What to improve on:

Employee’s professional goals:

Additional comments:

Performance appraisal example

Using the template above, this is how a company could conduct a performance review for one of their employees.

Name of employee: Robert Smith
Current position: Account Manager
Department: Marketing
Supervisor: Jane Brown
Date of last performance review: September 1, 2022
Date of current performance review: September 1, 2023

Problem solving: Meets expectations

Robert is proactive and seeks to solve issues before they become too much of a problem. He shows skill in balancing different collaborator requests with available resources and makes a point to involve people in complex tasks.

Teamwork: Exceeds expectations

Robert’s teammates report that he is a joy to work with and always looks out for their best interests before his own. Robert’s teammates feel supported when they work with him, and he goes out of his way to make sure everyone’s voice is heard.

Quality of work: Exceeds expectations

It’s nice having Robert on projects because you know the work will be done right the first time. Robert is so proficient in what he does, he even lends a hand to more inexperienced team members despite not formally being a supervisor or manager.

Contributions to culture: Needs improvement

Teammates reported that Robert sometimes focuses too much on results, sometimes at the expense of diplomacy. While his colleagues agree that his laser focus comes from a good place, it can sometimes come off as frustration or annoyance with less skilled team members. Robert is encouraged to soften his approach in these situations so as not to create a hostile work environment.

Decision making: Meets expectations

The team can rely on Robert to be decisive when it matters most. Robert’s proactive nature means he’s able to anticipate which decisions can cause friction, and he mitigates many issues on his own. There is concern that Robert can sometimes act too independently, not involving key team members in big decisions, but given his track record, the company has faith that Robert makes the right decisions for his team and the company.

Overall performance: Exceeds expectations

When you look at our company’s achievements over the past year, Robert’s performance speaks for itself. He is consistent in going above and beyond when it counts, and his teammates can rely on him when they need him most. Robert doesn’t shy away from a challenge and is willing to lead his team and his clients to success no matter what it takes. Robert’s direct reports, supervisor, and clients all find him to be an indispensable team member and a key factor in our company’s overall success.

Notable achievements:

• Formed a task force on improving project management processes that led to a 20% reduction in downtime
• Was instrumental in retaining his account during the RFP process when the business came up for review in July
• Onboarded two new team members, including one who was completely new to the industry whose performance now exceeds expectations of a new hire
• Helped launch important client initiatives e.g. Back to School Sale, End of Summer Event, End of Season Clearance Sale

What to improve on: I would like to see Robert contribute more to company culture. I think he can get so focused on achieving results that he forgets that not everyone is on the same page as him and he can proceed far into projects without any visibility from teammates. This can lead to a sense of them feeling rejected, even though everyone who knows Robert would tell you that he is very inclusive and means well. Perhaps take a step back before diving into work involving a broad team to make sure everyone knows their role and how they can help Robert meet his goals effectively.

Employee’s professional goals: Robert is seeking a promotion to be our next Account Supervisor. To this end, he has taken additional leadership responsibilities with more junior team members and has committed to taking coursework on team leadership and mentorship. Robert has also begun learning French, so he can better service our Quebec-based clients.

Additional comments: While the Account Supervisor position is not currently vacant, Robert has a very good chance to advance in his career with the company if he continues the good work and completes his leadership courses. While we cannot offer a promotion just yet, the company feels as though Robert deserves a merit increase in his salary given his track record of results and we would have no problem discussing this with Robert and the finance team at a later date.