important-of-performance-appraisal

Category: Performance Management.

Competency-based reviews help you evaluate and guide interviewees and current employees to focus on their strengths and help address their weaknesses.

Performance appraisals are a great way to evaluate how employees operate within your business and give them the guidance they need to improve their performance. As a manager, competency evaluation can be a powerful tool for you to use when interviewing recruits or coaching current employees to increase their value in the workforce.

You might be wondering, “What should I look for in competencies and how do I use them?” You’ll be surprised to hear that competency-based performance appraisals can be easily understood and, with the right approach, can be a powerful tool.

What Are Performance Competencies?

Performance competencies are the values you and your company have selected as the most integral skills or characteristics an employee must possess in order to effectively do their job. When looking to hire a new employee, competencies are the standards on which you base your assessment of the interviewee.

Questions to consider when hiring someone: Do they match our core focus? Could we improve their skills to suit our business with training?

When evaluating current employees as a review, it can help you understand how well they are working within the company and help focus training or efforts for improvement.

Questions to consider when reviewing an employee: Have they maintained their performance in the necessary competency categories? Is there room for improvement, and if so what is the best way to word my comments?

How to Define Core Competencies

As a manager, you can select the core competencies for your department or team. Depending on your business model, and what you’d like your employees to focus on, necessary competencies will change. How should you determine what competencies are necessary for your employees? Consider these three areas:

1. Job Responsibilities

What are the core elements of an employee’s responsibilities? Consider what their day-to-day tasks might be, challenges that will be faced, and how you expect them to respond to these challenges.

For example, if you are hiring someone for a front-end retail position, your core competencies might be: customer service, communication, and teamwork.

If you are reviewing the performance of an engineer, you may consider core competencies such as: technical skill, decision-making, and planning and organizing.

2. Expectations

During a performance review, it’s wise for a manager to think about their expectations for the employee. Thinking about the level of performance that you anticipated for an employee as well as their potential for development can help you evaluate the reality of their performance. Additionally, you may look at their previous work performance to see how their current performance measures up against the past, and if they’ve learned from experience.

It is a good practice to set clear expectations and assign goals to help current employees become a better asset to your business. If they excel in a competency, expect them to continue to excel—a dip in performance could indicate there’s an issue in need of immediate resolution. If there is room for improvement, set a specific goal for them to achieve in the period between reviews.

3. Lack of Competency

You might find that after setting core competencies that some people do not meet the required standards. This might be a major red flag– however, it’s important to evaluate your options.

Most core competencies can be developed through training or mentoring, and many can be improved with the right guidance. However, there are some competencies that cannot be easily developed, and can negatively impact an employee’s quality of work each day. For example, poor technical skills can greatly impact an employee’s contributions to an organization.

Benefits of Evaluating Competencies

If you are looking to hire someone to fill a position, understanding core competencies can help you evaluate who would be a good choice for the job. Oftentimes, not all candidates will check all the necessary boxes, but by evaluating their core competencies you can understand if you’re able to train or build them into your ideal employees.

When a performance-based appraisal is done with current employees, you can address your employees with how the business wishes to function; what core values they should be focused on, what they can improve, and how they can meet the standards set by the company.

Overall, this can improve performance as you and your employees have a firm understanding of one anothers goals and how you plan to achieve those goals.

When Reviewing

When you are reviewing your employees and giving your comments, it’s important to do two key things:

1. Reinforce competencies

If your employee has continually demonstrated a special skill in a specific competency area throughout evaluations, it’s important to reinforce this with positive comments so that they continue. This is more important if you have marked growth in the employee. If you are able to, try to provide an example scenario. For example, “Your teamwork has been consistently amazing. We especially loved how you worked with John and Jane on the previous project.”

2. Provide Constructive Reviews

As stated by Charles Schwab when interviewed by Dale Carnegie in How to Win Friends and Influence People, “I consider my ability to arouse enthusiasm among my people the greatest asset I possess, and the way to develop the best that is in a person is by appreciation and encouragement. There is nothing else that so kills the ambitions of a person as criticism from superiors.”

Following this, try not to format criticism as a long list of all the ways an employee has failed to meet expectations. Instead, focus on encouraging them with constructive criticism to help them perform better.

Compare these two examples:

Bad: “You don’t communicate with your team well.”

Good: “Make a concentrated effort to communicate more with your team so that we can all work together towards our collective goals.”

12 Performance Appraisal Competency Examples

To help you build your core competencies for a performance review, here are 12 core competencies. All of these examples are relatively general, and can be adjusted for use in any department or industry.

We’ll first provide a competency statement example to help you understand how these evaluations should be structured, and then we’ll offer up some examples of performance evaluation comments.

Problem Solving

Competency statement: “Employee can identify problems in a timely manner and rectify them without issue.”

Praise: “Your ability to effectively diagnose complex problems and find simple solutions is outstanding.”

Constructive comments: “If you’re addressed with a problem you’re unsure how to solve, try to ask myself or one of your peers for help. Finding solutions is a team effort, and together, we can come up with solutions that work for everyone.”

Decision-Making

Example: “Employee has shown to make decisions when asked, and has been able to follow through on those decisions with the best of their ability.”

Praise: “You’ve shown great initiative making decisions that have led to good outcomes. We’re proud to have you as a part of our team.”

Constructive comments: “When making decisions, try to understand the whole situation so you can make the best judgment on it. One good idea is to weigh the pros and cons to understand if the outcome will be the best.”

Teamwork

Example: “Employee has been an integral part of the workforce and has acted in team efforts responsibly.”

Praise: “You’re great with working with our team, and everyone values your input.” Or, “You’ve shown great leadership and are great at playing to everyone’s strengths.”

Constructive comments: “It’s great that you succeed in doing your job, but when others need help, try to offer help or even praise to cheer them on.” Or, “Try to communicate more with your team to best understand how the team can work towards our collective goals.”

Work Ethics and Standards

Example: “Employee has worked hard towards the company’s goals and has met standards of goals worthy of praise.”

Praise: “We’re so thrilled you put in your best work and would love to extend our congratulations. Good job, as always.”

Constructive comments: “We want you to embody our company’s ethics and standards. Here are a few suggestions we can work on to improve that.”

Focus

Example: “Employee has focused on their tasks without giving in to distractions and been able to handle unavoidable distractions in the workplace without degrading their work performance.”

Praise: “We love how you’re able to tackle a job and get it done without breaking from it.”

Constructive comments: “Sometimes it seems like you’re distracted. Are there any tasks that you’re doing that seem like too much of a strain of attention, or anything distracting you we can change?”

Ambition and Motivation

Example: “Employee has shown great motivation for work, and has been ambitious within the workforce to improve performance and provide additional benefit to the company.”

Praise: “We can’t be more amazed that you’ve improved this much. Great effort, we’re proud of you.”

Constructive comments: “We’ve found that you sometimes focus on some aspects of your job over others. How about we talk about what’s bothering you with those areas and propose a solution?”

Honesty and Integrity

Example: “Employee has shown up for work on-time, shown honesty towards their level of work, and has been up-standing in their integrity of work.”

Praise: “You’ve had a stellar track record of timing-in that has kept this company working smoothly.” Or, “Your work has been great and you have great pride behind it. You should be proud.”

Constructive comments: “Remember it’s OK to speak openly about things that are problematic with myself or other people of management.” Or, “This one job was done great, you should borrow the same pride from that onto your other work and make them just as good.”

Adaptability and Flexibility

Example: “Employee has proven to be flexible in their duties and has easily adapted to scenarios outside their normal work duties.”

Praise: “No matter what is thrown at you, you seem to be able to handle it. That makes us proud to have you as a part of our company.”

Constructive comments: “We find your job duties might be overwhelming you. Let’s schedule some additional training in the field you seem to be hindered by to help you out a bit.”

Planning and Organizing

Example: “Employee has created plans that they have followed through with, and has shown great organizational abilities that benefit workflow.”

Praise: “It’s amazing how well you can plan and organize your job duties and we’re impressed on how those plans are thorough and simple to follow.”

Constructive comments: “When tasked with a big project, try to work out a plan of action and tackle each step one by one.” Or, “To make sure your working conditions are as efficient as possible so you don’t run into issues. Try to organize a bit more.”

Communication

Example: “Employee has respectfully and effectively communicated with customers, fellow workers, and management.”

Praise: “Customers and your fellow coworkers all feel like you can communicate with great ability. We really value that in our company.”

Constructive comments: “When explaining things to other people, try to keep in mind they might not know what you’re talking about. It’s best to thoroughly, but concisely explain your thoughts.”

Technical Skill

Example: “Employee has shown great technical skill pertaining to their work.”

Praise: “Your skills are astounding and it really shows in the quality of work you do.”

Constructive comments: “Sometimes it seems like you lack a certain understanding of your job. That’s perfectly natural and fine, but we’d like to offer you some training or guidance to help you build your skills.”

Customer Service

Example: “Employee has been able to provide great customer service to ensure customers have the best experience the company can provide.”

Praise: “Customers always adore you and say you’re the reason why they do business with our store. We’re so happy to have you part of our team.”

Constructive comments: “Try to always keep an open mind with customers, even if they seem a little irate. Oftentimes if you keep up a good demeanor and build relationships with them, they’ll appreciate your effort.”

Carnegie, Dale, 1888-1955. How To Win Friends and Influence People. New York: Simon & Schuster, 2009.


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