How to Administer an Effective Performance Appraisal System

A performance appraisal system helps a business to determine potential managerial candidates, adjust the pay rate for each position based on performance and analyze employee performance to determine if further training is needed or if dismissal is appropriate. It takes time to develop a performance appraisal system that your company can use, but it is important as a human resources professional to learn how to administer an effective employee evaluation process.

  1. 1.

    Announce when the performance appraisal process will begin at least 30 days in advance. Encourage employees to make written notes of the questions they have for their managers and the points they want their managers to consider about their performance throughout the year.

  2. 2.

    Distribute a self-evaluation to employees at the 30-day point. Tell employees that they need to complete their self-evaluations and give them to their managers at least 14 days prior to their evaluation meeting. Encourage employees to make a copy of their self-evaluation and bring it with them to their manager meeting.

  3. 3.

    Require all managers to have their written evaluations, including the analysis of the employee self-evaluation, completed seven days prior to the employee evaluation meeting.

  4. 4.

    Review each manager's completed employee evaluation to ensure that it does not violate any company policies, or state and federal employment laws. If you find something inappropriate, schedule a meeting with that manager prior to the employee evaluation to discuss the issue and make appropriate changes.

  5. 5.

    Analyze the completed appraisal after the managers have their one-on-one meetings with their employees and determine if the managers' recommendations are appropriate. If a manager has suggested a pay raise, determine if the raise is within the company budget and if it would apply to the employee based on the appraisal.