Development Cooperation Handbook/How do we manage the human resources of programmes and projects?/Employee performance appraisal

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We can distinguish the following components of employee performance appraisal :

  • identification of the performance areas and performance objectives;
  • performance review (or measurement), i.e. making judgments about how “good” or “bad” a performance has been;
  • performance management, i.e. provide feedback and coaching employees to higher levels of performance so they achieve their potential.

In a nutshell the employee's performance appraisal serves four key purposes:

  1. improve employee performance,
  2. reward superior performance,
  3. discipline minimal performers,
  4. gain information for future decisions about staffing.

Basic Principles for Employee Performance Appraisal are:

  • Every employee has the right to have their performance supported and managed;
  • Every employee has the responsibility for ensuring her/his performance is measured and managed;
  • Every manager has the responsibility to review and manage her/his employees’ performance;
  • Performance appraisal should conform and reinforce the work culture of the organization and help to maintain a positive communication climateand specifically help to proceed towards a more:

Simple Attention.svg Attention: do not confuse reviewing Employee Performance with project performance! When monitoring and reporting the employee performance you are comparing

  • what the individual employee has achieved and
  • what the individual was supposed to achieve (on the basis of the agreed employee performance objectives.

When monitoring and reporting the project performance you are comparing:

  • what the team implementing a project plan has achieved (in terms of reaching the expected milestones and deliver the expected project outputs within the decided schedule and budget definitions) and
  • the expected achievements as stated in the project plan document.

Evaluation of the employee Performance is an essential component of the management the project and programme teams. In order to successfully meet the needs of a programme/project, it is important to have a high-performing Project Team made up of individuals who are both technically skilled and motivated to contribute to the project’s outcome. One of the many responsibilities of a Project Manager is to enhance the ability of each Project Team member to contribute to the project, while also fostering individual growth and accomplishment. At the same time, each individual must be encouraged to share ideas and work with others toward a common goal.

Although team performance (as in with project performance) requires more than an addition of individual performances, still the competence, the commitment and the integrity of the individual team members constitute the basic asset upon which team work is established. Through the evaluation of the performance of the individual team embers the programme/project manager will get the information she needs in order to Ensure that the team has adequate knowledge, Establish a Positive Team Environment and a Healthy Communication Climate, Work Properly and Ensure Accountability (thereby fulfilling the basic requirement for an employee empowering organization).

Employee performance includes the employee’s work results such as

  • quality or quantity of outputs,
  • work behaviour (such as punctuality)
  • job-related attributes (such as cooperation and initiative).

Managers should:

  • provide feedback to employees about how well they have performed on established goals.
  • provide feedback to employees about areas in which the subordinate is weak or could do better.
  • take corrective action to address problems with employees performing at or below the minimum expectations.
  • reward superior performers to encourage their continued excellence.

Guideline: Effective communication skills for the appraisal interview

The most widely used performance review standard is the ooutcome appraisal where managers are asked to assess the results achieved by the employees. (See other Varieties of performance review standard). The most common form of outcome appraisal is management by objectives, in which employees and superiors set goals together for the upcoming evaluation period and then measure the degree to which the employee achieved the goals. This method provides unambiguous criteria that are not susceptible to biases. However, it also can lead to a mentality of “results at any cost” or not reflect on-the-job problem solving.


See Varieties of performance review: Immediate-supervisor, Self-review, Peer review Subordinate review , Appraisal by beneficiaries, 360º performance appraisals

Challenges to effective performance measurement[edit]

  • A rater error is an error in performance appraisals that reflects consistent biases on the part of the evaluator. One of the most common rater errors is the halo effect, the tendency to rate similarly across dimensions. When the halo effect occurs, evaluators allow the rating that they give on one performance dimension to influence the ratings they give on all other dimensions. Despite its positive-sounding name, the halo effect can result in one performance dimension either pulling down or raising up the evaluator’s ratings on other dimensions.
  • Restriction range of errors occurs when evaluators restrict all their ratings to a specific portion of the scale. Three restriction range types of errors exist. The leniency error is when the evaluator only uses the high portion of the rating scale. The central tendency error is when the rater uses only the middle section. And severity errors are when the rater uses only the low portion.
  • A supervisor’s personal bias also can cause evaluation errors. An evaluator may systematically rate certain employees lower than others on the basis of age, gender, race, sexual orientation or other factors.
  • The influence of liking an employee can cause errors in performance appraisals if supervisors allow their like or dislike to affect that person’s evaluation. Research on the influence of liking continues. Rater liking and performance ratings are correlated, according to research. However, the correlation does not necessarily indicate biases. Evaluators may tend to like good performers and dislike poor performers. Therefore, liking an employee would not have influenced the objective measurements.

Give feed backs[edit]

After measuring the employee performance a fundamental step for Performance management is to providing feedback and to coaching employees to higher levels of performance so they achieve their potential. Besides written responses to written self evaluations (like monthly performance report), it is opportune to hold one-to-one meeting to discuss the ‘3 P’s’– progress, priorities and problems on the basis of the previously submitted reports.

Guideline: Effective communication skills for the appraisal interview

Some managers and employees are ambivalent about the performance appraisal interview and avoid providing negative feedback overtly. Managers uncomfortable with providing criticism sometimes provide it between heavy doses of positive feedback and make only vague comments. They also may bury in small talk or humor, communicating negative feedback obliquely. The discomfort felt by the evaluators manifests itself in avoidance behaviours that obscure the message and merely skims the surface of performance appraisal. When receiving negative feedback, subordinates may become defensive as they feel their self-esteem threatened. They may try blaming their deficient performance on others or on external factors. They may minimize the importance of the appraisal, question the validity of the evaluation or may too readily agree to the feedback while internally denying its accuracy. The solution to managing reactions is to train managers how to conduct constructive feedback sessions. In an effective interview, the employee perceives the appraisal as fair, the manager as sincere and the climate as constructive. Therefore, the employee is more likely to leave the interview informed about his or her performance and how to improve and determined to correct deficiencies. When providing feedback, managers should focus on the employee’s behaviours, not personality. Summarizing an employee’s performance by labeling him or her as “lazy,” for example, is not helpful and will lead to defensiveness. It is more beneficial to focus on what a person does rather than what that person seems to be.


see more in Employee performance management


See also Development Cooperation Handbook/How do we manage the human resources of programmes and projects?/Reporting project performance