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5 steps to make your appraisal system effective

Satish Doshi

Employee appraisal is a widely acknowledged HR 

tool for evaluating performance and to identify both

troublemakers and troubleshooters in your company.

While high performers justly deserve accolades, those

who fall short of expectations deserve a rap on the

knuckles. Although the channel acknowledges the

imperativeness of the appraisal process, it has largelyfailed to implement it effectively.

Key objectives

The primary goal of a good appraisal process is to

identify and reward achievers. It also provides a forum

of feedback based on a formal one-on-one discussion

between the employee and his/her immediate superior.

The employee is instructed how to enhance

performance. It also establishes the principle of 

accountability.

• Set realistic targets 

The first essential is to clearly lay down keyresponsibility areas (KRAs) at the very beginning of 

the appraisal period. Employees should know what is

expected from them over the next 12 months. Once

fixed, the KRAs shouldn't be changed at the manager's

whims. Set KRAs and benchmarks that are realistic.

Often companies set unrealistic targets that defeat the

purpose of an appraisal system, as employees lose motivation to achieve impossible

targets.

• Reducing delays

A common issue faced is the delay in conducting appraisals. If it's an annual

appraisal, reserve one month for the process. During this time, the HR departmentshould work with the single goal of completing the appraisal on time. Put reminder 

messages on the notice board or in the internal newsletter to remind people of the last

date for submitting appraisal reports. Team leaders' appraisal should be delayed only

as much as that of their teams. Salary revisions must be effected only after the

completion of their teams' appraisals. Ensure that the number of people reporting to a

line manager isn't very large.

• Transparency and objectivity

First off, the appraiser has to be credible, fair, realistic and objective. Remember that

employees form their opinion about the appraiser over a period of time and not during

the appraisal. For instance, they may judge you by how impartial you are in grantingleave to employees. Do you differentiate in giving assignments and projects? Do you

Setting Right KRAs 

For technical staff  

Number of customer complaints attended and

resolved successfully; level

of technical problems

handled; number of 

demonstrations made;

technical certifications

earned; scaling up from

attending one product line

to multiple products.

For sales 

Number of sales closed;increase in sales for an

account or for a geography;

number of leads converted

to sales; routine submission

of sales progress and report;

new accounts acquisition;

new products sold.

For administration

Bills paid on time; office

maintenance or time take for 

setting up new office;downtime of office

infrastructure like Internet,

electricity connection etc;

satisfaction of the

employees with admin.

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consult one particular employee for making most of your decisions? Rethink.

Achieving clarity of performance goals is important. KRAs and expectations should

be recorded in writing to avoid any confusion. Always back up the appraisal report

with facts. For instance, instead of saying "you take a lot of days off", you could be

more specific and say "in the last three months you've taken 21 days' leave".

• Conveying bad news Always convey bad news sensitively and in person. Managers have to be trained for 

breaking bad news. It should be done on a one-to-one basis and never in the presence

of a third person. Create a scenario where you do not have to explicitly break the

news to the employee. Help him do a self-assessment with open-ended questions. For 

instance, you could, over a discussion, lead the employee to admit that his or her 

performance has not been up to the mark and therefore undeserving of an appraisal.

• Computing increments

Keep in mind the percentage growth of the company and also external factors such as

industry growth, salary scales, availability of talent etc. If your company has grown

below the industry growth rate, the appraisal should factor that in. Similarly, if 

engineers with particular skill-sets are in demand, this must be considered while

giving them pay hikes.

Don't forget that an appraisal process establishes the principle of accountability, and

sets performance benchmarks for your company and its employees. A good appraisal

process is one that helps evaluate performance gaps, not just of employees but also of 

managers and top management. Hence, it's important to make it a two-way process

that pays due attention to employee concerns and grievances. If you fail to provide a

good work environment to your employees, you cannot expect superior performance.

Channel Issues 

"My HR department continues to miss appraisal deadlines and the process

inevitably gets delayed"

- Anuj Gupta, Director, Trident Infotech

"Politics has increased in the company with employees trying to out-do each others

in trying to be in the good books of management"

- Suresh G, CEO, eCaps Computers

"We scrapped the appraisal system as it adversely affected employee morale"

- G Balakrishnan, Director, Ontrack Solutions

"It's easier to evaluate how many leads are converted into sales, but how does one

quantify the contribution of the administrative department?"- Ajay Maitin, CEO, Graphic Trades

"A negative appraisal fails to motivate employees and cause them to perform worse.

Only those having high self-esteem are stimulated by criticism to improve

performance"

- Suresh Menon, Manager, HR, Frontier Business Systems

Satish Doshi is Managing Director of Sampoorna Consultants, a leading HR

consultant and recruitment agency.

Send in your views and queries to CB@expressindia.com 

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