Put an employee performance appraisal system in placeEmployee performance appraisal systems tend to get a bad rap. After all, who hasn't heard about — or experienced — a bad performance appraisal?
At worst, performance appraisals can feel like an ambush, a morale killer or a waste of time. At best, however, effective performance appraisals can empower your staff and improve your organization's ability to fulfill its mission.
A clear, thoughtful and consistent employee appraisal system can help your nonprofit:
- Manage talent and develop leaders
- Align staff work with organizational priorities and goals
- Increase employee productivity
- Improve employee job satisfaction, morale and retention
Developing the right system for your nonprofit
Before you create an employee performance appraisal system, consider what'll work best for your organization. To determine your approach, consider:
- Criteria. What criteria will your nonprofit use to review employee performance? Criteria could be based on employee job descriptions, competencies or individual goals. Which skills and competencies matter most to your nonprofit's success?
- Feedback sources. Where will you get feedback about your employees? Options include supervisors, colleagues and external contacts. Keep in mind the importance of ongoing feedback and coaching throughout the review period.
- Ratings. What system will you use? Options include a scale of 0 to 5 or categories, such as "what's going well" and "what needs improvement."
- Timing. When will reviews be done? Options include annually, twice annually, quarterly or even more often. Consider how much time reviews will take and whether you'll tie reviews to changes in employee compensation.
- Goals. How will you set them? Employees often feel a disconnect between goal setting and performance reviews. Review your nonprofit's operating plan and the goals set for each program. Break down those goals to the level of each department and staff member. What can each employee do to help, and how will progress be measured?
- Self-directed reviews. Will these be completed by the employee as part of the review process?
Once you've settled on the basics, create an evaluation form. The form should include:
- The basics: employee name and job title, reviewer name and job title, date of review period, date of review completion
- A statement about the purpose of the evaluation, such as to review progress and establish future goals for development
- A statement explaining that the information in the evaluation is confidential
- Brief instructions on how to complete the evaluation form, including an explanation of the rating system
- A list of areas in which the employee will be rated, based on the specific criteria chosen for that employee
- A list of the employee's previous goals and an area for discussion about progress toward each goal
- An area to list the employee's other accomplishments
- An area to list the employee's key objectives for the coming year and professional development objectives, including a timetable for milestones and accomplishments
- An area for comments from both the employee and the reviewer
- An area for signatures from the employee, reviewer and human resources representative
Attach the employee's current job description to the evaluation form. When completing the form, provide concrete examples of what an employee does well or needs to work on.
Also, make sure all of your employees understand your performance appraisal system, are trained in how to use it and realize its importance to your organization. Managers who aren't confident in how to conduct performance appraisals aren't likely to effectively identify what an employee can do to develop and grow.
Discussing employee performance appraisals
To make the most of your employee performance appraisal system, engage your employees in thoughtful discussion about their work and experiences during the review period. Managers should schedule time with each employee to:
- Go over the review
- Highlight job achievements
- Evaluate progress toward established goals
- Establish expectations going forward
- Discuss ways to support future development
Keep in mind that nothing managers discuss with their employees during a review should come as a surprise. To do their best work, employees need coaching and specific feedback on their performance year-round, not just at review time. Regular meetings are recommended between performance appraisals to support ongoing efforts toward goal achievement and to give adequate time for performance improvement, if needed. Plus, when employees know where they stand, they're less likely to dread performance reviews.