How am I Doing?
A few years ago I was consulted by a new manager who was frustrated because several of his employees refused to sign their annual performance evaluation. Some accused him of playing favorites and being unusually harsh and punitive. After speaking with him, I learned that he had made several common but crucial mistakes.
First, using the score of 1 through 5, where 3 was acceptable performance, he decided that to score above a 3 the employee had to, in his words, "walk on water." Previous managers used 3 as the baseline for the average employee (with 4 as superior and 5 as exemplary); so his employees now felt almost attacked at getting a 3. He made the mistake of not explaining his philosophy ahead of time. He also was very stingy with written comments, thus leaving the employee with the impression that they had done nothing extraordinary in any area. One employee said, "To me 3 is just for showing up."
Years ago maverick New York City Mayor Ed Koch was known for asking his constituents at meetings and in public "How am I doing, New York?" A performance evaluation should basically answer that question for the employee.
Start with the job description which lists all the performance expectations. You cannot reasonably expect an employee to perform outside of what has been mutually decided on. A job description is like a contract and expecting other behavior is a breach of contract.
Give feedback all year long. If an employee is surprised at evaluation time, that says more about the failings of the manager than it does about the employee. You should not keep score (positive or negative) and spring it on an employee once a year.
Arrange a time and place to allow ample time for a discussion. A good evaluation is a two way process and should not be rushed. There should not be just "judgment" by the manager, but feedback and questions from the employee as well. This is a time to evaluate performance, reward good performance and establish new goals and expectations.
As a manager, common mistakes to avoid include the halo effect. This is a cognitive bias whereby the manager is influenced by former behavior. So, the manager might be influenced by something that employee did earlier ( John is all good or all bad). Or he might even score the employee based on the group to which the manager has mentally placed the employee (racial, gender, troublemaker, all chemistry techs etc). As silly as that sounds, the reasoning is that since all members of that group behave in a certain way, then John's performance cannot be any different.
Another common mistake that managers are guilty of, but rarely aware of, is recency. Recency is a bias that occurs whereby the employee is judged mostly on their most recent behavior. Again it could be something good or bad, but that is what stands out to the manager, so the employee is saddled with that one behavior as a representation of an entire year's performance.
Tools which I have used in the past include having an employee complete his/her own evaluation and then discussing it, pointing out areas of agreement and explaining areas where I rated them differently; with examples of behaviors I would consider acceptable. This can be more time consuming, but is ultimately a very valuable technique.
As a manager I also find 360 degree evaluation really invaluable. That is a process in which I ask all my customers (subordinates, peers, internal and external customers) to rate me confidentially (and preferably anonymously) based on 4 or 5 criteria. A confident manager should consider such honest feedback seriously and modify behavior accordingly.
Performance evaluation is an important tool; not just something required by regulatory agencies; and not just a means to fulfill an HR function. Done poorly it contributes to poor employee morale and does nothing to change behavior. Done well it can improve organizational performance tremendously.