Seeking Advice on Effective Performance Appraisal Methods for a Growing IT Team

Hi Seniors and fellow members, I am here seeking your guidance on performance analysis and appraisal methods. Please review the detailed scenario below and provide your valuable input.

I work as an HR executive with an IT software product and services company for the past 1.1 years. During my tenure, the resource count has increased by 40%, and the current headcount stands at 24 people:

- Developers and Designers: 18
- Sales Team: 3
- Accountant: 1
- Quality Assurance/Testing: 1
- HR: 1

Appraisal Period and Current Methodology

The appraisal period for this year is from March to June, and I am unsure about the procedure to implement as I am not well-versed in performance analysis and appraisal tools. Currently, the only method I have implemented is a 360-degree competency-based performance appraisal, focusing on Organizational Behavior, Quality, Delivery of work, and accountability. Please find attached the evaluation sheet for reference.

Seeking Comprehensive Evaluation Methods

As I am new to these practices, I am uncertain whether this method provides a comprehensive analysis. I am seeking a better approach that can be applied uniformly to evaluate all employees across departments, not just developers. I am looking for a common protocol for performance analysis.

I kindly request your guidance on best practices for performance evaluation and appraisal based on my requirements. I appreciate solution-oriented replies.

Thank you in advance.

Regards,

Let me congratulate you on the opportunity you've got to design an entirely new PMS. Not all HR people get such an opportunity. I'll share my thoughts.

Creating an Appraisal Cycle

From a pragmatic perspective, what you could do is first create an appraisal cycle in discussion with the management. Now that we are in January, I would advise that the appraisal cycle for the future years could begin in April (to coincide with the financial year) for a duration of six months or one year. A 360-degree feedback system wouldn't suit such a small and young enterprise. If April is the appraisal cycle, it is better to start by setting performance goals for the next appraisal cycle. This means that by mid-March, the employees know what they are expected to produce and work on for the next year (or six months, as the case may be). That leaves you roughly about two months from now.

Performance Feedback

Meanwhile, you need not have a formal performance appraisal, but general performance feedback will suffice. This needs to be planned to commence by the first week of February. The managers need to discuss with the employees how, in general, the performance of each of them was—task-wise and behavior/attitude-wise. For this, you might need to prepare a guideline. The managers may or may not rank/rate the employees, but what is important is that all employees should have received feedback by the end of February.

This needs to be documented, and if possible, an analysis needs to be done, just for the records.

Setting Goals for the Next Cycle

Beginning in March, the managers need to sit with their respective employees to discuss in detail what is expected of them during the next cycle. This needs to be a discussion and not an order from the manager. Mutually agreed goals need to be created and recorded. You might need to create a template for capturing such agreed goals with timelines and the magnitude of importance.

Most importantly, all of this needs to be communicated to all employees by the end of this month.

So no time to waste. Gather your thoughts and act now.

All the best. Do inform the progress.

Regards,
Sree

Have you tried conducting the Pre-Performance Evaluation meeting before implementing the 360-degree PA? This is a common impediment that may be causing issues for employees, leading to vagueness. If this pre-evaluation fails, it can create an adversarial relationship where the employee and the evaluator are not working cooperatively toward the same goal but are instead at odds with each other. Expectations should be made clear to both the evaluators and the employees being evaluated, which essentially means communication should be transparent.

Appraisals should always be carried out periodically, often as a source of measures in performance, typically half-yearly or yearly. Quarterly analysis can be a waste as it does not allow sufficient time to measure progress. The major objective is to be specific, measurable, achievable, challenging, and time-related.

Effective Evaluation Analysis includes:

- Employee Self-Evaluation: These are individual assessments that help employees self-assess their personal strengths and weaknesses. This procedure helps identify areas for development and potential improvement. This information can then serve as the basis for discussion between the employee and their manager.

- 360-degree performance evaluation: This is exactly as you understood. The basic way to explain this procedure is that managers in large-scale industries often spend significant time in meetings or on other business purposes, making it difficult to discuss strengths and weaknesses with the individual being assessed. To overcome this, some companies have introduced the "360-degree appraisal" format.

To improve PA, the employer needs to listen to employees by soliciting feedback on the effectiveness of interactions, which is uncommon in many businesses. Therefore, many employees feel they have not been assessed well enough. A company should foster two-way communication.

Regards.

Thank you so much for the pragmatic approaches referred to. I would like to know a few aspects in detail. Please find the listed queries and clarify them at your convenience.

1. Criteria for Evaluation Sheet

The evaluation sheet for analysis and feedback requires certain criteria. Must these criteria reflect the organizational objectives, or can they be anything to analyze the quality of work employees have done? As per my earlier practice, I have considered competencies, organizational values, and individual behavior as the major criteria for analysis.

2. Dealing with Biased Ratings

While rating/evaluating and providing feedback, what if the managers give biased ratings (which has actually happened earlier, just to reduce the percentage of hike to be given, and more common bad remains longer than the good; managers will point only at the mistakes done instead of appreciating the innovations/smart work done)? So, I think I should ask managers/team leads/BDM to record the critical incidents. Please share your views on the same.

3. Setting Up Goals for the Next Cycle

What sort of goals should be put in front? Is it required to define the goals by the HR person, or is it the responsibility of the manager? I would be glad to participate in setting up the goals for the next cycle, either in terms of HR issues or work-related issues.

4. Recording Mutually Agreed Goals

Mutually agreed goals should be recorded with timelines and importance. What if the manager and subordinate do not come to a final conclusion? Are these mutually agreed goals the only ones considered for the next cycle, or will it be common as usual?

5. Constraints of Mutually Agreed Goals

If mutually agreed goals are the only constraints for the next cycle for that particular employee, in that case, the evaluation sheet will vary from one employee to another, which will become a complex process. Correct me if I am wrong.

6. Quarterly Analysis vs. Evaluation and Appraisal

I would like to do a quarterly analysis, but the operations over here won't leave me enough time to do so. Is it okay if we do evaluation and appraisal at the same time?

7. Pre-Performance Evaluation Meeting

Brief me about the pre-performance evaluation meeting.

Looking forward to your valuable inputs. Thanks in advance.

Regards

Pre-evaluation is conducted as a review of the actual performance appraisal. In this session, you involve the Managers, HODs, their team, and other employees to list several crucial areas of the employee's work—listing the tasks where the employee did well or performed below the mark.

1. Employee evaluation depends on productivity and outcomes. Apart from the analysis mentioned by you, the simplest measures accountable depend mainly on comprehension strengths, weaknesses, and effective communication skills.

2. In order to eliminate the biased nature in appraisal systems, discuss and decide the criteria of assessment. Talk to the particular team of employees with their supervisor or manager to discuss job performance. A one-on-one conversation will not intimidate an employee in the same way as a group interview. This makes it much easier for you, where you really don't need to worry. Comparing the JD to the end results delivered will help evaluation without any challenges.

3. Goals can be set according to the JD provided with the KPIs decided by the process manager in front of the HR and the Senior manager. Focus a good portion of your efforts on measurable goals because you need strong performance in these areas to get a good evaluation. Be honest in how you report work outputs and avoid exaggerating them to appear like a high performer.

4. This point is similar to the 3rd point answered.

5. The evaluation sheet would not vary because the work performance, accomplishments, and challenges are documented in a journal throughout the performance evaluation period.

6. Giving an interlude of time between one review and another actually gives some space to identify and rectify their skill level performance, applying their best abilities to perform all assigned tasks.

I also request the HR members to revisit the employees regularly for monitoring and provide corrective verbal feedback from seniors.

Regards

I appreciate your guidance so far and would like to know the basic concept of Performance Management beyond the theory. So, can you please give me your own views on the below queries:

1. What is Performance Management?
2. Why is it important in organizations?
3. What are the major reasons and objectives of Performance Management?
4. What could be the result of Performance Management?

I would appreciate your replies and thanks in advance.