How to design an appraisal process

So, you have been tasked with designing an appraisal process. But where do you start? And how can you make sure it is successful? In this blog, we explore 3 ‘pre-thinking’ considerations and 6 key principles to follow when designing an appraisal, taken from an episode of The HR Uprising Podcast with Actus CEO, Lucinda Carney.

Consider the circumstances

What is the current situation in your organisation and why do you want to change it?

Professor of Organisational Psychology Rob Briner refers to this concept as ‘evidence-based HR’ – where we ask what are we trying to address?

Some of the common problems we get told by clients are either cultural or design related issues. For example:

• The output is not worth the paper it is on
• It is too backward thinking
• It’s a paper exercise
• It is too long
• It isn’t being completed properly
• Leadership don’t value it

The key point here is that the problem is almost certainly behavioural and requires some cultural exercise to achieve buy-in. Therefore, if you do have an existing appraisal process, do not assume only form changes are required as it is important to consider the cultural piece.

If you do not have a system in place but want to introduce something, ask why do you need something? Is it because you feel you must have something? Be clear on what you are trying to achieve and design because building a template could be counterproductive if it doesn’t reach your organisations goals.

What type of organisation are you designing the appraisal process for?

Another consideration to think about is the existing environment or culture that you are designing an appraisal process for. This is crucial as it will impact how open and responsive people are to complexity. For example, a large corporate might be more used to doing processes and will just need defining whereas a start-up would need a softer introduction. As a result, the pace of change can differ depending on the organisation.

It is also important to explain the ‘why’ when introducing the change – using case studies is a good idea and explaining how the benefits align to your organisation, i.e. to provide greater visibility. Additionally, you should align the message to your audience, which could be different to people at the top of the organisation and those at the bottom. Why not take a look at our white paper: how to deliver organisational change for further support?

What are you looking to achieve with a new performance appraisal process?

It is also vital to consider the appraisal’s purpose in the pre-thinking stage. The most common reasons we hear from our clients are to:

1. Encourage more meaningful conversations
2. Regular feedback
3. More engaging and forward-facing
4. Refresh/liven up existing processes.

Also look at strategic reasons – for example, is it to reduce attrition, or to identify/develop people with key skills? To summarise, it is necessary to go through this ‘pre-thinking stage’ of designing an appraisal process to set up for success. Think ‘Why?’, ‘What is the organisation type?’ and ‘What are we trying to achieve?’.

So, what are our 6 tips to designing an appraisal process?

Tip 1: Keep it simple

Make sure that the appraisal process is simple. The form should be a maximum of 3 pages, ideally 2. Otherwise you risk it becoming too long for one conversation!

Tip 2: Make sure both parties prepare in advance

Is there a way to make sure both parties fill out a pre-preparation document or form in advance to capture a summary? This will help to aid the conversation and to capture a summary. It means both parties will have had time to think about it and therefore it will likely be a more quality conversation.

Tip 3: Don’t use too many competencies/behaviours

If you are using competencies or behaviours, the ideal number is 5. Certainly, less is more, as by having too many can make it complicated and hard to cover.

Tip 4: Consider the language used when designing an appraisal form

Is it backwards or forward looking? So, it is ‘what did I achieve’ or ‘what am I going to do moving forward’? You might also want to consider what you call it. For example, at Actus we like to refer to it as an ‘achievement discussion’ as this has a more positive tone.

Tip 5: Are you using the right rating scale?

If you are using performance ratings, consider using a scale of 1-4 (where 3 is the average) rather than a scale of 1-5. Usually on a 1-5 scale, psychology tells us that those rated a ‘3’ will feel they are only ‘average’ and demoralised but not on a scale of 1- 4.

Tip 6: Make sure people feel valued

The appraisal should be designed in a way that makes people feel valued. It should not just be an exercise to run through. Instead of just focusing on performance, which is often perceived as a business benefit, consider pulling data to give people access to opportunities, focus on career aspects to get people to buy in to the idea, and see the benefit to them.

We have all heard the expression ‘performance appraisals are dead’. We know that this is largely because they are seen as a ‘tick-box’ exercise rather than a means of having meaningful conversations that benefit the whole organisation.

Start designing your appraisal using our template by clicking below.