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Performance appraisals are a key component in any organization. Not only do they provide you with a quantifiable measure of performance, but they are also used for administration, compensation, and even development purposes. In fact, properly done performance appraisals are not only meant to benefit the employee, but their supervisors, as well as the organization as a whole.

However, in order to get the maximum benefit out of your employee performance evaluation, you need to make sure you have the right evaluation grid. Luckily for you, I’m going to tell you how!


First things first: Identify the need and purpose

I know you’re thinking this is a stupid point; the purpose of a performance evaluation is to evaluate performance! However, while that is true, it is not the only purpose. And if it is in your organization, well, it shouldn’t be!

The first thing you need to do before creating an employee performance evaluation grid is identify your organizational needs. Are you looking to improve performance? Determine compensation parameters? Identify developmental needs? Determine a guideline for recruitment and selection? Or all of the above?

In an ideal world, you would aim to get all of these out of your performance appraisal. However, it goes without saying that the more you want from your evaluation grid, the more you will have to put into it. Make sure you identify the need and purpose of the evaluation grid in order to find the right balance.


Determine who will rate and how often it will be done

As with any other evaluation, if you have more raters and perform the evaluation often, you will get better and more accurate results. However, it isn’t always feasible to have 5 raters evaluating an employee every month!

Depending on your organizational needs and the job in question, you can determine who the best raters are, and the frequency of the evaluation, that would add the most value to your process. For example, if you are evaluating a customer service representative, it would be beneficial to have their supervisor and their customers evaluate their performance; while a customer evaluation for a financial analyst would add little value. The same goes for frequency, it would be a good idea to evaluate your sales team on a quarterly basis, but would be unnecessary to do so for an administrative assistant.


Evaluate job-related SMART objectives

And by “SMART” I don’t mean intellectual! Make sure that the criteria by which you are evaluating your employees are

  • Specific
  • Measurable
  • Actionable
  • Realistic
  • Time-bound.

The task dimensions you are using to evaluate your employees should come directly from the job description (if it has been done correctly!). If you do not have a comprehensive job description for the position you are evaluating, you will need to conduct a job analysis to identify those dimensions.

Make sure your task dimensions are SMART, and that they are weighted according to importance, frequency, and significance.


Include your organization’s core values

Simply identifying performance dimensions and using them as the sole determinant of overall performance is not sufficient to produce a successful employee performance evaluation. In fact, in order to ensure a complete and comprehensive evaluation system, it is necessary that the appraisal include a scale that clearly articulates the organizational values based on the organization’s mission statement.

You should keep in mind that organizational values are more characteristic than anything else. Innovation, creativity, and organization are common desired behaviors that form an organization’s core values. But these are not learned behaviors as much as they are innate characteristics; so consider evaluating your employees’ behavioral tendencies to get the complete picture and improve your developmental efforts.


Have a “follow-up” section

The main goal of evaluating employee performance is to see how their performance is changing from one evaluation period to the next. Are they improving, staying the same, or deteriorating? This follow-up section will allow you to clearly see if the employee has reached the objectives they have set out to reach in a prior evaluation (whether in terms of improvement or development).


Discuss developmental goals and needs

Your employee performance evaluation grid should include a development section. In this part of the evaluation, allow the employee to express their development goals and objectives.

Not only would this open up communication between the employee and their raters, but it would also make the employee feel more motivated, engaged, and important. These then translate into improved retention rates, organizational commitment, and even better performance! Do you really need more reasons? Just include it!


Have clear evaluation parameters

This part is beyond crucial. There are many things that contribute to incorrect evaluations but the most relevant are bias and inconsistency. I’m sure you are all familiar with the basic “unsatisfactory-to-outstanding” scale that is common to evaluation grids, but having these scales without specific parameters often lead to invalid, inconsistent, and inaccurate ratings.

These rating errors can be significantly reduced if you simply include clear parameters in your employee performance evaluation grid. Precisely explain, at the end of each section, what “unsatisfactory”, “marginal”, “satisfactory”, “very good”, and “outstanding” performance include.


Additional pointers

These don’t really relate to creating an evaluation grid, but are important to your evaluation process as a whole- consider it free advice, if you will!

  • Make sure the employee knows what they are being evaluated on – this will allow them to focus on desired behaviors and would increase their confidence in the evaluation process;
  • Train the raters – show them how to use the evaluation grid, and make them aware of common rater errors so they can consciously aim to avoid them;
  • Keep it simple – for the sake of both the rater and the ratee, we aren’t looking to add more stress to anyone;
  • FEEDBACK – always, always, always give your employees feedback after an evaluation!

And there you have it – everything you need to know about creating an (excellent) employee performance evaluation grid! Identify the needs and purpose, evaluate SMART job-related objectives, consider your organization’s core values, follow-up on employees’ progress, and discuss their development goals – and don’t forget to have clear evaluation parameters!

You can get so many benefits out of a good performance appraisal, so if you feel like yours isn’t that great, it’s probably time for a change!

Leen Sawalha

Leen Sawalha’s interest in the effects of motivation and behaviour on businesses has led her to obtain a Bachelor’s Degree in Psychology and a Bachelor of Commerce specializing in Human Resources Management. Currently in the process of acquiring her MBA, Leen’s expertise lies in the integration of both disciplines to enhance the effectiveness of an organization’s human capital.


Improve your productivity, performance, and prosperity by focusing on your most important asset: your employees. From recruitment to retirement, AtmanCo’s psychometric assessments will help you achieve Business Happiness!


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